1: 3 is stable for a long time, the first official 4 release will be out by the end of the month.
2: Answer could be found by searching the forum (ok should have been mentioned more explicitly in another place but anyhow....) The 3.3 releases are 'withdrawn', The major difference was support for the upcommming console and some db updates which had to be reverted. functionality wise there were not many differences.So 3.2.6SP1 is the latest
3: It's a few jars and dependencies nothing more.The basics of which jars is described to some extend in the docs, but if you use maven, most can be resolved via that mechanism.
4: Yes. like you would embed any other jar or set of jars. Nothing spelcial about it. Sure you could have some library clashes but that is also not different than with other jars and dependencies, e.g. xml libs, dom libs etc... common java issues with other apps as well.
5: What is deploying non-programatically? Via pigeons? There are ant tasks that can deploy a definition to a database, but that requires configuring a database for this task. If you do it from your own application it is nothing more than passing an xml file to a deploy method. This is done in many of the testcases as well and can be seen in some examples in the forum. You could build a webapp where you upload that file and pass it to the deploy method. Really no rocket-science. But if you do not tell us what your problems were, we can only guess and that is never good.