New to PS3

Hi I have some few questions and hope somebody can Answer me.

I just go a new PS3 500 GB from my GF Xmas, and wondering what I can use all that space to?

1) Is it possible to transfer movies from laptop, external or usb drive to the PS3?

If yes, which file types would the PS3 accept? Avi? MKV?

2) The DVD player in PS3, make my movies in 4:3 is it possible to change to 16:9?

3) Is it possible to download "free" games from the internet and transfer to PS3 without jb the ps3? if not pls explain what I need to do, and do I risk to be banned from playing online?

4) Can I watch movies from my external drive?

Thanks in advance :)