Yo, Jeff!  With the current beta control panel, all that you wish and more is possible.

1) Yes.  I myself have not done so because I've been too lazy to go buy a supercheap jump drive, but yes.  Either by renaming the stock alarms that are in there or loading up a jump drive with files.  I use it to stream internet radio instead; that will likely change soon.  The speakers are currently filling my 500sqft living room at 1/3 volume level as I type this.  I would characterize the sound quality to be roughly equivalent to a pair of $25-30 computer speakers (without subwoofer) - better than any clock radio I've ever owned, substantially better than my Macbook laptop and on par with a cheap boom box - not bad for a leather bag the size of a grapefruit.  It's almost moot, however as the Chumby has a 1/8" line out for audio; I had mine plugged into my $15k AV system at my other house and it sounded at least as good as my Airport Express (which is digital).  I happen to have a spare 5.1 receiver and speakers that I'm toying with installing in the bedroom which is just the kind of ridiculous overkill I enjoy in my sleeping habits.  In short, sound quality is a non-issue.

2) Yes. Weekday alarms, Weekend alarms, 1-time alarms, or custom alarms for every day of the week.  You can also set the snooze time individually for each alarm.  You can also set it to display whatever "channel" you want once the alarm has been cancelled - for example, you could tell it to wake you at 6:45am to "Swan Lake", snooze for eight minutes, and then once you cancel rather than snooze, have it display the traffic cams on the way to work and give you current weather conditions.

3) Well, depends on your glasses and how far away, but yes.  In "Night Mode" the clock you get has numerals about 5/8" tall.  If you want to deal with brightness some other way there are clocks that are fully two inches tall (they scroll).  However, it's a pain in the ass reading Google headlines from across the room - the resolution on the Chumby is a little better than a newspaper so you can get some *truly* tiny text going on.  It's a quarter VGA screen - the "clocks" available are limited only by the creativity and patience of those who code.

4) The Chumby has a night mode that is dimmer than my Sony Dream Machine alarm clock from ten years ago.  There are also a number of widgets that dim for "night mode"  (the Sleep Sound Generator does, anyway).  Additionally, the Chumby has two levels of brightness for regular display; the bottom one is a little bright for a pitch-black room but a little dim for a daylight-lit room (in my opinion).  I'm not aware of any way to automatically schedule Night Mode.  This is something I'd love to have the ability to do;  I'm sure one of the Chumbians will weigh in Monday or Tuesday about whether that's something they're interested in making possible.

Because the Chumby is not a finished product.  Chumby Industries has been remarkably open-minded and accessible for product suggestions and the like - if it doesn't do something you want, post it on the forums and see if somebody clever comes up with a way to give you what you want.

*My* killer alarm clock would run a flash-based Wave generator, fade it out over an hour, fade it in over an hour in the morning, and "sunup" my bedroom lamp with voltage control.  Currently, I can do that on a Mac Mini ($599) with some X10 control ($400).  There have been discussions, however, that the Chumby control panel *might* have the ability to fade audio in and out on the alarm panel in a forthcoming beta... and if I were smart enough to interface with the Chumbilical I'll bet I could get a lamp dimmer going (once I found the proper 5vdc/110vac interface, of course).

The Chumby is about the most killer alarm clock you've ever seen.

btw, it will be nice if some one just use the ambient clock interface.

follow that with a combination of google calendar, chumby can tell you when to sleep , and when to wake up (with travel time compensated based on searching to where the meeting place is).