Pozdrav druze!
1. Activation mails are the biggest problem around here. Don't ask me why. I have the very same problem and have to activate the accounts manually even though I disable activation by mail!
2. I believe that we are "forced" to use Western. It's not a big problem at all at my forum. Ali bi Vukova slova bila dobra!
3. That's something I would like to know! btw if you find out how to do it please share that info with us.
4. I believe your users can host their avatars on some other place like phohobucket.

Pozdrav