It holds 12,000 songs
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Rip the music files to your computer and then sync the ipod to it via itunes
I have the new Ipod touch (4th gen) and I searched for Tunee Music and it came up with nothing, so no, I don't think it is available for the Ipod Touch
Yes, iTunes store. It comes with the iPod.
Here is the totorial How do you download music into your i-pod touch? http://www.downloadvideos-convert.com/video-to-ipod-converter.html
The 32 GB apple ipod touch holds 7000 songs and 40 hrs of videos and it a really good ipod