I understand what set.seed() does and when I might use it, but I still have many questions about the function. Here are a few:
For your question 3 there is the char2seed function in the TeachingDemos package which will take a character string (alhpa numeric) and convert it to an integer and by default use that to set a new seed. The idea was that students could use their name (or some combination/subset of names) as a seed so each student gets a different dataset, but the teacher can reproduce each student's dataset.