I haven't used the Joomla appliance but despite that, I think I can pretty much answer all your questions.

1. I would assume that it is the full 1.6 version as it is installed from an upstream tarball.
2. Again I would assume so. Why not have a try and see how it goes?
3. Yes. Under the hood TKL appliances are a customised version of Ubuntu 10.04/Lucid and as such use the standard Ubuntu repos, along with the custom TKL repo (for a couple of custom TKL packages). However, as mentioned above, Joomla itself is installed from upstream so will not update via apt. Another bonus is how TKL is configured for security updates to automatically install every day.

I will be doing a 1.6 install soon.  I can't imagine it is not the Full version.  1.5 Versions are full and functional. 

However, come to think of this, I did end up doing a Lamp/Joomla install for 1.5 as there was some issue with the MySQL install (perhaps innodb) that I needed to get beyond.  (there is likely some reference to this on the Forums here that you could search for)

It was very easy to install Joomla to the Lamp System as well.

I look forward to trying the 1.6 Joomla install.  Right now I have both a Hardy/Joomla install running (2009 version) and a Lucid/Lamp 11.1 running Joomla  (1.5 for both)..  The 11.1 versions have the great features of having highter security "out of the box" and a more rich "back end" for admin.  There is not much difference, that I can see, to the actual Joomla performance between the systems.  It functions.

Give it a spin.  Easy to setup and explore.