#2
When i started lessons, my guitar teacher focused on grade 1 and he showed me the book so i knew what i had to play. The book has 5 songs in and some scales, you have to learn 3 of the 5 songs to play with a backing track. Then you have to play the songs and scales to the marker and he decides wether you have passed or not. I'm still working through the grades and it does help improve your playing.
#3
I've never tried being graded, so I wouldn't know, but just because you're not graded doesn't mean you're not good. For example one of my friend's is on grade 3 and I'm miles better than him, I'm not being arrogant, he's just really quite bad, so by all means go for it, but don't feel like it's a neccessity or anything.
Funny words.