I can answer these questions.

1. WebDAV should not cause instability in Laserfiche. However, it is not reliable as the WebDAV client that ships with Windows has many problems with caching, locking, and session management. Lost edits are the number one observed problem. The performance is unfortunately not very good either due to bugs in session and cookie management. Windows 7 SP1 is the earliest client I would try to use as a WebDAV client with LF.
2. LFS still mediates all access to documents. Security rights are still enforced, Laserfiche auditing still applies, etc.
3. Metadata is inaccessible. It's still there but you can't see it from Windows. The Windows WebDAV client is unaware of versioning so LFS will automatically create a new version for every change. Unfortunately this tends to produce a huge number of meaningless versions. To get around this, one can check out a document using the client before editing with WebDAV, and then check it back in when done. However, this workaround requires using the LF client.
4. Enabling WebDAV support on the server will cause lfs.exe to reserve port 80 for its own exclusive use, precluding running web apps such as Web Access or WebLink on the same host as LFS unless an alternative port is chosen for the web applications.
5. WebDAV is really your only option at this point to enable embedded document links to function. Laserfiche is investigating alternative solutions for a future version of the product.