1. Yep saw that with Firebug. I think they are neat, but not worth the cost of waiting for a million external requests to complete. ;)
3. You should experiment with the different caching options in W3TC and benchmark each test in FireFox. The reason for this is some options settings in W3TC work well for some sites and not for other sites depending on what you are trying to load.
4. I use the All in One SEO plugin and have always been very happy with it.
5. W3TC caching will attempt to handle image files the best it can and reduce the load as best as possible. If you are calling image files with img tags and in CSS and not trying to load them statically then the size is not a big deal. If the image files are part of your Theme or other graphics then you can reduce their size by saving (rendering for web) them as png's. Also your background image takes forever to load. I suspect that you are not using CSS repeat.
6. Yep W3TC will definitely help with this. You can try and use Minify in W3TC, but because of the difficulty of making this really work for the millions of different possibilities with websites - my hat is off to Frederick Townes for even attempting this - this is 50/50. One trick you can do is move all your js script calls to the bottom of your pages so the js scripts load last. The ideal way to handle this is to manually combine scripts into 1 or more to lessen the requests, but this obviously means that you have to do some code hacking.
7. Don't have a suggestion. I have been meaning to look around, but have not gotten around to it.
Yep you should see a noticeable difference when you set the default posts per page from 10 to 3.
And i just took a look at your site and it appears to be loading at least twice as fast and maybe even faster than that. very nice improvement.
Also check into increasing your memory limit as Kurt Payne suggested, but do not exceed the max memory limit that your Host allows or your Host may decide to penalize you for that.