1) Yes, it makes everything, including trees, bushes, grass, planes etc look sharper. I am one that likes eye candy and dislikes the drop in immersion caused by blocky textures.
2) Yes. Remember that to get the benefits you must download the hires pack. Just selecting 1024 textures without downloading the special hires pack will appear to make 1024 textures but it actually just upreses the standard 512 ones. (You knew that, but others might not.)
3) Yes it's worth it. On my 3G E8400 w 512M HD4850 there is essentially no effect on frame rate.