Mornin' eskimo,
I can't provide the exact law texts right now, but here's the gist:
Open display of the Nazi Symbol is illegal as long as it's not being displayed for documentary reasons.
For that reason you will find it in every schoolbook, every movie, every museum and every tv documentary. It's not edited out or censored in hollywood movies, for example. You just won't find it out on the street printed on someones shirt. So yes, anybody in germany will recognize it and no school children leave school without thorough knowledge about the nazi period.
Dealing responsibly with our past is taken very seriously in this country, and I think it's quite safe to say that there's a documentary about WW2 on some tv channel almost every day. I can't imagine how any german citizen would _not_ know details about the nazi period, even if he tried very hard.
Wearing the swastika or the SS rune can get you in jail for up to three years. Of course, it depends on the circumstances. If you wore it at a costume party (like Prince Harry, hehe) you'd probably just end up paying a fine. Wearing it at some neo-nazi rally would mean prison time.
That's about it. There're no blocked websites. Like Fishu said, the discussion of the nazi period is not illegal over here. All that's being done is making a difference between documentary display and casual display.
Owning Mein Kampf is not illegal afaik. I've read excerpts from it in school. You won't find a copy on the shelves of a bookstore, but you could probably order it.