1. As much ATI videocard as you can afford. cheapest mobo and processor that you can afford to run them, a good PSU that won't fry under heavy load on 24/7 pushing.
https://en.bitcoin.it/wiki/Mining_hardware_comparison2. This whole bitcoin thing is still pretty new, you're not going to find any whitepapers. the above linked wiki should answer a lot.
3. If we knew that, we'd be doing just that. Hell, if I knew BTC was going to soar from $20 to $150 I would have moved every spare penny over a couple months ago. LTC is probably more prone to the 51% hack, but otherwise it's probably a fairly solid bet.
4. We sure hope so, that's why we're mining. If you use windows, it'll be quite a bit easier but also less reliable. Linux is tough as nails but more stable.
5. depends on the price of electricity and the price of BTC and how quick the difficulty changes. IMHO, if you see it as a long term investment (screw ROI) you'll come out better. A poor financial decision today may become a stellar one in a few years.
If this is money you can't afford to not recoup, or if you don't have the stones to bear massive amounts of risk, do yourself a favor and run away screaming.