You have to install it between the data output cable and the disc drive, and the chip has his own USB conector, it is not like you can use the Wii's USB, and it has nothing to do with your ciclowiz or WiiKey so they can both co-exist..!!
i dont think so, it may not be practical or useful due to resource usage, but i believe it would be at least possible. of course, i dont expect one to be made quickly or even recently. even if it was a hardware based solution it is still 'possible'.
i know what you mean, and with flatmii you can actually probably stream ISO's too (not from HTTP though, just using a direct file system over a wireless network)
example: connect laptop to flatmii, your laptop is connected over a wireless network. use the flatmii software to load an iso over a network drive.
although it is a bit of a lame way to do it, it still IS possible
im still waiting for a USB hardrive backup launcher solution however..