I'll address point 1 and the unnumbered point 3.
1) Any music you downloaded from Kazaa, unless they have gone corporate like Napster, will be listen-toable on Rockbox. On good faith, I'm assuming that music is legally yours so am not bringing up any of that.
3) I don't think there are any (valid) reports of rockbox "frying" any DAP it's been put on. If that is your fear, you can dispell it. If you put rockbox on your DAP and it turns into a doorstop, you can rest assured it was going to die on its own soon anyway.