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#1 1. Yes, as long as its a 3d engine, or a complicated 2d engine. (Dungeon Keeper 2 did this with the possess spell)

edit: If it is 3d engine, then what you see from the 1st person view will be the same models, textures, place as with the 3rd person view; However LoD comes into place here. Example: Dungeon Keeper 2. Normally over head isometric view. However 1st person view with the possess spell brought you into the same place you were seeing, however, because closer, models were quite simple and texture detail didn't look as great.

With a 2d engine it would probably be logical that it would load you into a seperate "level" based on the level you were on, only with different textures, models, etc... that owuld be more suited for 1st person so allowing more detail.

2. Stuff that works and is needed for your game.

3. No idea on the details about your game, so I have no idea.

There used to be a good directory on the net for 3d engines, had about 150 of them listed, unfortunatly it went under. I think someone else started to make one(Crystal Space I believe, could be wrong) but it doesn't have the