Highest Quality JPEG..
Yes!
I, for the most part, use PSP and have to run the optimizer when saving.
Re: the weathering..
Unless you can find it in the default skins, it's been made from somebody as far as I know. Unless someone has tapped into the "in-game" weathering somehow.
You won't see layered psd or psp templates in the skin folders unless you've put them there yourself.. Templates are created by us.. not them