>> Is it possible to customize the designer in a way that allows only custom tasks/service nodes (just examples...could be other BPMN constructs as well) to be available/visible to business users? In general I want the business user to see only pre-defined process constructs that are available for use (and not the world!). <<

Not yet. We are working on this and are looking for community help - read the intro part on http://surdilovic.wordpress.com/2012/11/15/workflow-patterns-support-in-jbpm-designer/ to get an idea.

>> - Is it possible to introduce custom validations such that if the business user constructs process model that is not valid or possible in a particular business case (even though it may be a valid BPMN 2.0 model), then a error can be shown (similar to red X for invalid BPMN)? As example, there may be pre and post conditions on some service nodes that needs to be satisfied before a valid link can be established with other nodes. And such pre and post conditions can be based on input/output data or rule based. <<

That would be really nice to add - open a Jira (feature request) and if you want to contribute / help with it that would be great as well.

HTH