1) Although many here will disagree, WoW is currently the end all be all of all the MMORPGs out there, very noob-friendly too, plays smooth and looks fantastic unless you hate the art style.
2) It's about owning everyone and becoming the uberest on the server, simply put.
To expand, and although it is really an unreachable goal for most, you do this either via your PvP or PvE achievements, your l33t gear, having great reputation/fame among other players, etc... But the most important thing is to have fun with the game, of course.
3) I'd say 128kbit down/16kbit up is all you'll ever need for this.