If you are using the same account, it should say "install." If not, either the dev pulled it and put a new version out there (I don't think they did this for docs to go) or you used another account.
In regards to 1, I prefer the iWork apps on the iPad. I really like them and make a lot of use out of them with barely any problems (aside for lack of pivot table option in Numbers but I work around it).
I've no idea on what you said after the question mark; however, yes you will have some compatibility problems if you use a lot of the more "advanced" functions of office. iWork is good for the basic use viewing a single word document maybe or creating one. Same applies to Numbers. Out of all, Keynote is generally the most compatible with PowerPoint with Numbers being the least due to advance Excel uses almost a lot of offices use these days such as Pivot tables.