1) Yes. I use GIMP2, but there are others. Basically any image or pixel editor that supports transparency and RBG will work. Some good suggestions are posted here:
viewtopic.php?f=17&t=5252) Message either Daniel, patroid, or myself and we can get you practically any image of an existing unit. It is simple to use a copy/paste method to montage parts of existing images with freehand or others.
3) No, I personally do not. I don't think Daniel does either, but I don't know about Alexander82 or patroid.
4) The image size is only 32x32 pixels, so the file size is naturally smaller than others which average 256 kb.