#1. generally clear if you want it to be brighter.
#2. well, if you want it to be more focused go for narrow, but both can be fine.
#3. im not too sure but blue and green tend to be good choices.
#4. hell yes, the arduino's use a chip that is practically the same as the $50 robot.
the $50 robot tutorial only shows how to get like 10 I/O out of the board...
the atmega8 has 20 I/O available for use, 17 excluding the programming header.