It appeared to me that the BIOS settings program is loaded of a small dedicated partition on the HD. Pretty weird.
Yes, they do. You can download a program from Compaq (called, cutely enough, a ROMPAQ) to re-install this partition.
Not that I've learned this from experience. (Whistles innocently)
As for performance, it should be fine. I actually have a P1- 133mhz w/ 64mb RAM that I use as test Win2k server. Amazingly, for a single user, it is able to click along ok. No speed demon, but it works for very light tests.