PowerPC macs dont seem super cheap atm on craigs list. WHats the specs people would recommend for Morph OS? I see powermacs are supported and most of those are in the 500 ghz range it seems, whereas the mac minis seem a lot beefier.
I'd say better take one closer to 1GHz or more and preferably R8500/R9xxx based gfx card... more the vmem the better.
How much fuss is installation?
Easier than ever on any Amigaish system. For multiboot it requires some more work, but for MorphOS only it's about pressing c-key hold on the boot to boot from CD and then few clicks with mouse on installation wizard and you're done.
I assume full support for USB 2, gamepads etc ?
Yes, but I think that gamepads should be HID compatible and not require any proprietary drivers. I think most digital ones should work.. analog driving wheels etc need more looking.
For apps that can install and run natively, does this work from adf or can I copy an installation from a real amiga or?
I've copied all my old apps from my real Amiga installation and that's the easiest way. Generally installing on MorphOS should work too. I never installed anything from adf, but I guess you could mount them or unpack to some mounted device...
Examples of popular applications that will work? (final writer 97, Dpaint etc)
What I have configured to my use as 68k versions: FXPaint, PPaint, ArtEffect, ImageFX, Photogenics, Elastic/Fantastic Dreams, TVPaint, Imagine, Real3d, Amplifier, AmigaAMP, GoldED, PageStream, FinalWriter, AmigaWriter, MakeCD, TurboCalc, IBrowse, DCTelnet, AmTelnet, DOpus Magellan2... and lot more

Then there are MorphOS native versions of many Amiga apps too, like YAM, SimpleMail, AWEB, Voyager, SongPlayer, AmIRC, CED...
multiple screens / screen dragging?
Multiple screens yes. You can even have different skins for each MUI screen, and the greatest thing in MorphOS2 is, that its screenbar modules are visible/usable on every MUI screen too.
Screen dragging is available as 3rd party extension, but I'm not sure if many use it or is it still working. I couldn't use it on real RTG Amiga and thus I can't miss it on MorphOS either.
.info files?
Yes. Native icons are plain PNG images (easy to make!), but tooltypes etc are still same.
Dumb question maybe but wireless support?
Not internally (yet). You have to use external access point or similar solution.