1) Yes. As long as it isn't hosted here, this should be fine.
2) You can upload images for use as content on your site. You cannot have a script like imageshack for other users to upload images to your site, using it to host the images for others.
3)Yes. If you use a MySQL database, you must get the MySQL upgrade, which is $9.95 or 350 USEFUL posts to this forum.
4)Yes. The upload script in forums is secure and is totally allowed.
5)Yes. You can have any domain you want, but there are restrictions on bandwidth from your extra domain. I suggest using co.cc's free domain and not use it as a framed re-direct, but as an actual solid domain. I can help you set this up if needed.
TOS Readers Digest condensed version:
You understand no phising.
No scripts that use your site to browse the internet, such as PHProxy. (Proxies are sites that you can go to to visit blocked sites, by using the internet connection of the server rather than your own.)
You can't have a site here, and use an Iframe to put it on another site located on another hosting company. However, the use of Iframes in your site that is hosted here on 110mb is fine, such as for using an Iframe to put a chat onto your site.
http://en.wikipedia.org/wiki/Doorway_page This is a description of "Doorway pages". Don't do them.
Torrents are a form of P2P filesharing often used for illegal purposes. Trackers tell torrent clients where the files are. They are not allowed as they are resource intensive scripts.
Again, no using your site like Imageshack or Megaupload. Not allowed.
Radio blogs are not allowed. This is due to the same as the above post. 110mb can't be used as a filehost. HOWEVER: You ARE allowed to host files on an external filehost and link to them on your site.
The MySQL restriction is because it causes the disk to constiantly read and write, making the heads move alot. This causes the drive to die alot faster than it normally would, and is also resource intensive. Search spiders are not allowed.
Again, IRC chats aren't allowed to be hosted here, nor are IRC Bots like Eggdrop bots. You CAN use an Iframe to put one hosted somewhere else on your page though.
You cannot have your own upload script on your site. The one inside of a forum is the only one allowed.
You are allowed to register up to 5 free accounts on 110mb. This limit is lifted so long as you have at least 1 paid upgrade on each account.
You can't have a beer or cigarette or illegal drug fansite. Nothing promoting these things are allowed.
You can't use your site like spamyourfriends.com. This is resource intensive and in some places it is illegal. Best to just not do it.
You can't host Copyrighted material on your site without permission. This includes images, music, or written documents. Music, artwork, or writings of your own production are totally ok.
Porn involving persons under the age of 18 is not allowed as it is illegal in most places. Also, the newer servers are in the United States, and child porn is illegal there. Since the server is there, you have to follow the laws where the server is located.
Have a name that makes sense for your subdomain. Don't use aaklghasklghaskjjni as a username. It will be deleted.
You have 15 days from the point of account creation to delete the default "Account Created" page and publish your site.
Hopefully this helps you out some. If you have more questions, please ask.