1) Not yet.
2) I would definitely let my kids play video games. I own a GameCube, and will own a Revolution when it comes out. So my kids will probably start playing video games on the Revolution or whatever comes out after that. While there are studies that show that video games can harm a child's development, video games improve eye-hand coordination which is essential for other aspects of life. So they would be allowed to play age-appropriate games in moderation. When my son(s) reach about age 14, I would start letting them play the more graphic games, as long as they understood that the events in the video game were fictional and the aggressive actions should be reserved for the game world and not the real world.
3) See #2. Eye-hand coordination development, for one. And that there would be a pretty strict set of rules that would have to be followed. Ie: Homework and chores must be completed, Academics would have to be satisfactory, etc.
I got a NES when I was 8 because my parents were painting the house. We played that thing to death... Mario, Duck Hunt, World Class Track Meet, Legend of Zelda, and Kung Fu all the time... my grades never slacked off because of video games, and I haven't done anything violent. The important thing (and you should definitely include this in your research) is that the parents must be involved in the children's lives and that includes video games. The parent needs to be responsible and aware of what types of games the children are playing. I've advised a few parents against some games (GTA, etc) because of their hardcore aggressive nature (the children were 10 to 13-ish).