Affiliate Questions and New Installation

I have a customer that is currently using the CRE Loaded shopping cart and is very frustrated with the inability to program the site like he wants it. I have convinced him that Joomla would be a better platform for him to be working in and so far he agrees. The problem is, that he currently has over 600 affiliates and he wants to make the transition as transparent as possible.

Now, with this is all said, I have a few questions:
1) What does the affiliate's referral link look like? Currently, the old site uses: www.mysite.com/index.php?ref=483 where the last number is the affiliate's ID number.

2) Is your affiliate program only 1 level or can an affiliate benefit by others become an affiliate under them?

3) Does your affiliate program work on percentage of the sale of the product only and not include any shipping or handling?

4) Since my customer currently has a live working site under his specific domain, will it be possible to build his new site under a different domain name, and test it and debug it, then transfer it over to his normal working domain name? (License question really)

Thanks for your time!

Jon

PS. I read on the forum where someone suggested that affiliate earnings could be used towards purchases on the site...I like that idea as well...that's currently how a lot of my customers use their affiliate account and I have to track this information by hand. Just wanted to add my vote!