By "powerful enough" do you mean enough disk space, or something else?
Converting video into FLV need lot of CPU. So you will need a good server that is not already overloaded. video conversion is done by mencoder or ffmpeg, so how much CPU power needed depends on the video format, and the conversion tool, not vshare script. Script only calls these command to convert video.


2. I understand that source code is not available, so how can someone modify the code for this script?
You will not able to modify the script. The script work as you can see in the demo. If you need some other features, this is not the script for you.

3. By "normal PayPal" does that mean it does NOT support Payments Pro, where the customer can do a credit card purchase directly on my site?
Only paypal is supported.

I'm wondering if I can submit specs for changes that I would need, and get a quote and a promise of delivery.
We plan to do this, but currently we are busy with current bug fix and many features are pending, so we can't take custom work at this time.