From what i've been told its basically just who's got the most potions. Which is cool with me because that means i'll be wining every single battle. I make tons of HP and SP potions from all the materials I farm on a daily basis.
Not that I know of. All I heard was that it was pretty much a waste of money. I guess all you really get is bragging rights from it but people will still deny that kind of thing.
Its not fun to watch when your Computer can't handle something like that. They need a specific area for Guild Wars. Also the GM events are horrid. I got caught in the middle of one and my Computer nearly exploded from the massive amount of people in it.