No; after the initial backup, Arq only uploads files that have changed.
Arq stores backup data in S3 in a format similar to that of the open-source version control system 'git'. This is for 2 reasons: de-duplication (to avoid redundant files on S3) and "packing" small files together (for less transaction overhead).
More details here: s3_data_format.txt
Yes. In fact, Arq is 100% Backup Bouncer compliant, unlike many other online backup offerings. Even Apple's Time Machine is not 100%.
No. S3 has a 5GB limit, so Arq stores larger files as multiple S3 objects. Arq can backup files of any size.
No, unless you tell it to. Arq can use all your available bandwidth to do backups, or you can choose to limit the transfer rate in the Preferences.
No, Arq only backs up to Amazon S3. S3 seems cheaper than Dreamhost though -- a Dreamhost account is $8.95/month for up to 50GB of (non-web-content) storage, $.10/GB per month after that; S3 is $.10/GB for only as much as you use. S3 would be only $5/month for 50GB. S3 also stores your backups redundantly and it's fast.
No, Arq is built especially for the Mac. If you want a backup program for Windows that backs up to S3, there's Cloudberry Backup.
No. For a bootable backup we recommend SuperDuper. Arq is complementary to SuperDuper; SuperDuper creates a bootable backup on another hard drive, and Arq creates versioned backups online.
A bootable backup is a duplicate of your hard drive. It's great if you need to get up and running very quickly in the event of a hardware failure -- you just boot from the backup. But you have to plug in your FireWire or USB drive and update the bootable backup, or it gets out of date quickly.
Arq does versioned backups of the folders you choose. This provides insurance against damaged or accidentally deleted files. A duplicate backup would just copy the damage and delete the same files, but with a versioned backup you can "go back in time" and get the undamaged/undeleted file.
Arq backs up to S3, so there's no need to remember to plug in a USB drive -- it backs up as long as there's an internet connection. The best backups are the ones that actually get created, after all.
Arq retains versions similar to the scheme used by Time Machine -- hourly for the past 24 hours, daily for the past month, and weekly until you reach the S3 budget you've chosen in the Preferences.
If you only use Arq for your important files and your hard drive fails, you'll have to replace the hard drive and install OS X from DVD, and then restore your important files from Arq backups; this would take longer than simply booting from an external drive.