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PS3 uses Playstation Network (PSN) which is free, you still need to pay for your internet service
No
First you need a DSL or Cable internet service. Then you need to have a router if you don't have one already. Connecting the PS3 can be wired or wireless and the related link has procedures
no, the internet is only needed for full use of all the PS3 features and Games can be played without going online
You can not share your phone wireless internet with your PS3. The PS3 will search for a WiFi connection and if one is found it can be used to connect to the internet. If you have internet service it is not a problem to connect to the PS3