I have made my own hd pack vga cable that goes in conjunction with the vga bios, and also have the x2vga transcoder.
1) Yes, the vga cable supports high definition (720p and 1080i), as long as you use the ms HD pack when moding the cable.
2) It does not work with the vga bios. You need 1mb chip to flash the bios to, and since the matrix is only 256k your out of luck. I have half of my x2.1 flashed with the vga bios and the other half flash with the xecuter bios, and have a switch to turn on and off the vga bios. Works slick as poo.
3) The cable in conjuction with the vga bios gives a 100% true vga signal, while with a trancoder there is not a 1:1 transfer of colors. That being said, i really cannot see any loss in quality with the x2vga compared to the vga cable plus bios.
4) Yes
5)It's a hell of a lot easier to buy the x2vga, and have someone else do the dirty work for you. Especially if your monitor doesn't sync on green, then you'll have to had a sync seperator to your vga cable.