Well... technically, if one insist on learning individual stock investing or trading, it's best to start out with a relatively small balance. That way, the losses would not be so great. As to the original questions:
1. There are several good ones out there, and some also have low trading fees. However, which best suits you depends on your trading style. Still, I recommend looking at TradeKing.com. They're only $5 per trade, and I've read reports that they are fairly user-friendly. If you're more into buying-and-holding, another good one to look at is sharebuilder.com. That is a part of ING now, and they include ways for automatic re-investing. That's assuming if you are dead set on trading individual securities. Otherwise, I would recommend looking at Vanguard.com.
2. That depends on your investing / trading strategy. If you're not sure, please realize that there is no reason why one must invest in individual stocks. Most investors can do as well with Vanguard index funds, probably better since it minimizes investor risk.
3. In a properly-diversified portfolio, you should have a little bit of both.
4. and 5. highly depends on you your investment style. I personally recommend that everyone read the Boglehead's Guide to Investing first.