This is an example of a module being displayed inside the menu dropdowns. This feature can display any module or module position, allowing for multiple modules in the same dropdown.
Yes it can! This is a significant security improvement.
The safe mode limits PHP to be able to perform actions only on files/folders who's owner is the same as PHP is currently using (this is usually 'apache'). As files normally are created either by the Joomla! application or by FTP access, the combination of PHP file actions and the FTP Layer allows Joomla! to operate in PHP Safe Mode.