1. Instantly after purchasing you are given the downloads which will last 120 hours (5 days) or after 5 downloads each (I think). The 'phparcadescript_v4' is only 2MB, but make sure you have the bandwidth available to download 2.5GB if you want all the 5 game packs offered as well (2700+ games). The two main gamepacks are 1GB each, but not resumable and can't be placed into a download manager, so you need a good connection. If you don't get them in time, you can request for more time or just pick games from Mochigames or another source instead.
2. I suggest for the basic installation, reading the tutorial:
http://www.8hourarcade.comI would recommend you know at least some basic html, php and css. Server setup is pretty straight forward if you know the basics.
Getting a good domain and host that supports your needs is the first step.
3. No problems finding free games, there's lots of sources and gamepacks available, most are free.