Here is what I know (limited):

1: Yes, if you fall below a threshold, the chiclet goes away.Y

2: Green , Black (User has disabled Reputation), Grey (Somewhere between 0 and -??? Reputation points) & Red (After -??? Reputation points)

3: Yes, see above

4: See Above

5: Dunno

6: Each user has a "Rep Altering Power" that they can use (provided they hold 20+ reputation points). Each time you click on the Scales, that amount of "Rep Altering Power" is applied positive or negative.

7: Don't think so. I have a few grey comments that have no changed color.

Remember, you can only give 3 reps a day and must give rep out to 50 different members before you can give rep to the same member again.

I am certain that this feature is there to protect against "Lynch Mob" dinging.