1) yes, and yes it will also record in a 720pn-like mode.
2) yes, in fact you can go way beyond pixel-for-pixel if you want (like zooming in on PhotoShop). If you have a 1920x1200 monitor you can get full-screen pixel-for-pixel 1080p.
Cool! I was somehow under the impression that the variable frame rate was part of the 720pn mode.
Barry, I know the Dell 24" 1080 monitor has kicd of a bad rap here, but if I monitor on it via DV rack as opposed to the component outputs, do you think the image on the Dell would be less noisy?
Yes it'd look a whole lot better. The analog inputs on the Dell are ... well, you get what you pay for, and let me just say that you're not paying for the analog inputs! The raw computer-based footage looks much better on the Dell than the live analog inputs do.
It's not just noise on the Dell, it's also severe banding/contouring and other issues. The Dell makes a great computer monitor, but a poor video monitor. If you use it in conjunction with DV Rack you'll be using it as a computer monitor, bypassing its big weakness. It's still not going to compete with a true production monitor (a 26" Panasonic production monitor is $5,000; the Dell is $700 -- there are reasons for that!) but it'll do much better as a computer monitor than it ever would as a live analog HD monitor.
Also, you don't need a monitor that can display the full camera pixel count to see a 1:1 or even larger Field Monitor, though you will have to pan in that case.
You can switch DV Rack to full-screen mode and back by pressing Ctrl-ENTER -- that will leave you with a nice, clean Field Monitor display.