I haven't used the Joomla appliance but despite that, I think I can pretty much answer all your questions.
I would assume that it is the full 1.6 version as it is installed from an upstream tarball.
Again I would assume so. Why not have a try and see how it goes?
Yes. Under the hood TKL appliances are a customised version of Ubuntu 10.04/Lucid and as such use the standard Ubuntu repos, along with the custom TKL repo (for a couple of custom TKL packages). However, as mentioned above, Joomla itself is installed from upstream so will not update via apt. Another bonus is how TKL is configured for security updates to automatically install every day.
Hi
I haven't used the Joomla appliance but despite that, I think I can pretty much answer all your questions.