WPPrivacy is a plugin to not log IPs from comments.
If you are reading this it's probably because you are interested on your commenters anonymity. If you don't, you don't need this plugin.
No, sorry. Try libapache2-mod-removeip if you use apache2.
No, you don't. The libapache-mod-removeip will hide the IP address from the commenters to wordpress, the same as this plugin does.
Sure, but I'm not sure that you really want to let google or wordpress.com register the IP address from your commenters.