Try saving your project as a html page then copy and paste the code on your page or pages. Worked for me like that in DW. I use MM very little now because it's not seo friendly but I do have some sites I manage that have been verified with Google with the MM on them and they do rank high in Google and Yahoo. To get Google looking at the sites I used Google's Webmaster Tools.
Yes. Bluementals works well in CS5 and so does All Web Menus.
Xara should do more and upgrade MM. It really is some nice software.