Hi Earl,
Several good questions. Big topics, so I’ll recommend a few longer references.
First reference I would recommend is “Statistics Used by the Query Optimizer in Microsoft SQL Server 2008” for the full backstory on statistics (http://technet.microsoft.com/en-us/library/dd535534(v=sql.100).aspx). That paper covers the answers to most of your questions. Questions 1, 2, 4 and 5 are addressed in the paper.
Regarding question 3 – there isn’t a direct override (although there are many of us who would like that option). There are tricks for addressing issues and influencing CE, but with varying effectiveness. I talk about the main CE issues I commonly see in the following SQLperformance.com article (http://www.sqlperformance.com/2012/11/t-sql-queries/ten-common-threats-to-execution-plan-quality). If you have Pluralsight access, I go into more detail on them in the SQL Server: Troubleshooting Query Plan Quality Issues course (http://bit.ly/1ikr4mu).
Also – check out Kimberly Tripp’s statistics video (free MCM video) here -> http://bit.ly/1iXaOdn.
Hope this helps.
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