1) The dictionary is VERY easy to use. Just move the cursor in front of the word and the dictionary reference automatically pops up.
2) I don't think it's awkward at all. I have all my books and games in collections. It's quite user friendly.
3) You can organize every item on your Kindle regardless of it's origins. I have many books from other places.
4) Mine haven't yet. I have heard of people having the problem. I have also read that the first graphite K3 buttons had a slightly glossy finish that was the cause of the problem. The buttons on mine and all the newer ones have a matte, very slightly rough finish.
5) To my knowledge the crash problem was only related to the non-lighted Amazon cover. I've never had a browser crash.
If I lost my K3 tomorrow, I would replace it with the same. I absolutely love it.