Yes. For setup information read How to Setup your Framed Site.

You will need to "target" the search panel. This is covered in How to Setup your Framed Site.

Yes. Use the "result link target" option on the "build index" page of the Control Center.

For sites with single a frameset the technique is to display the search results in your "main" (or "content") frame and ensure that only "main" pages get indexed. For sites with multiple framesets the technique is to use some javascript on every page which ensures the correct frameset is loaded around the page. Both of these techniques are covered in How to Setup your Framed Site.

Yes. If you configured your search panel to show the search results in a frame you need to ensure that only pages that belong in that same frame are indexed. This is covered in How to Setup your Framed Site.