1: As Zaffy-Laffy said, split damage just means more than one damage type. Armor with piercing and elemental protection (for example) blocks some of the piercing damage in monsters' attacks, and some of the elemental damage in monsters' attacks, but none of the normal or shadow damage in monsters' attacks. Read the wiki pages "Damage" (and "Shield", while you're at it). Each monster family has a preferred damage type to deal. In the shallow parts of the Clockworks, monsters deal primarily normal damage. As you go deeper into the Clockworks, monsters increasingly deal their preferred damage type. However, even in Stratum 6 there is a lot of normal damage being dealt. You always want normal armor, to protect against this normal damage.

2: Read the wiki page "Damage". Damage is really the single most important rule in Spiral Knights.

3: It used to be true that upgrading an item automatically unbound it. This behavior was changed in May 2011.

4: It depends on how much mist energy (i.e. how many extra accounts), how many crowns, and how much time you have. It also depends on how specific your desired UV is. For example, suppose that you want a Combuster with CTR+3 or CTR+4. You'll expect to roll at Punch about 64 times, for a total cost of 1,280,000 crowns. Alternatively, you expect to craft about 640 times. If you're crafting using 100 mist per day, then that will take you 320 days. You make some money from selling all of the bad items you craft, but you lose the money you could have made by using that mist in the Clockworks, and you may also have to buy materials.

From my personal experience you should get multiple sets of armor and helmets. Though that being said the amount of damage you take doesn't change a whole lot from your armor/helmet. It seems more to be a single heart difference between having defense against the attack and not having the defense against that attack. Which over the course of a long run makes a pretty big deal but unlikely you'd notice unless you looked.

Shields though, those are good to have three of. A shadow one, an elemental one, and a piercing one. Since if all defend against normal as well, you're all set. The reason I say it's more important is that shields regenerate, so lets say a shield has 10 health and each enemy attack deals 4 damage. But the defense reduces it to 3.5 damage. Now three hits and it's dead either way but if you manage to spread out those three hits out it'll still be around. Same with the 4, but there you have to wait for it to regenerate 2 while the other shield only needs to regenerate .5.