That depends on what quality mode you choose. The lower the quality you choose the more you will get on each DVDR/RW.
Yes. DVD authored material is always encoded as MPEG2.
See the answer to your second question. As a general rule, up to 2 or 2.5 hours per DVD is acceptable to most people.
It takes as long as your home movie is. It is recorded and encoded in real-time by the DVD recorder.