Q: What the difference is between WPA and WPA2 and how are these settings affecting the access of other computers to the internet through my Time Capsule

I have a Time Capsule of the 4th generation and I am pretty impressed since I just had a fried harddrive on my 3 month old Imac and Time Capsule restored it fully including all programs etc. without having me to put in all serial numbers etc. for that I give it an A+. However what I find very frustrating is the very short and incomplete user manual and setup instructions. I give those a D-. It does not explain the consequences of certain choices to a normel non computer gig user like me:

1. I do not understand what the consequences and difference is between the security setting WPA/WPA2 and WPA2 when setting it up. It would be helpful if the manual would explain something like: If you set it onto WPA2 then computers older than XXX years will not able to hook up to the internet through your router...or the likes, since I slowly supect this may be the reason for some of my troubles.
2. I also have a 5 year old PC with vista connected to the Time Capsule. It can wireless connect to the Time Capsule and access the printer (I have managed that after some painful hours...) but it cannot access the internet with that PC through the timecapsule wireless, only if I hook it up with a cable. Why? Does that have to do with the fact that I have set the TIme Capsule to WPA2?
3. Our PS3 can connect wireless, no problem. However, I friend of mine tried it with a quite new Toshiba Notebook and he could see the Time Capsule but again it shows the line from the Time Capsule to the internet blocked. All other computers linked with data cable to the Time Capsule are connected to the internet no problem. What have we done wrong? Should I change the security setting to WPA/WPA2?
4. I tried the latter, but then another problem does come up, which was there from beginning on: When I change the settings for my Time Capsule my Imac suddenly cannot find the Timne Capsule anymore, even so I am only 3feet away from it. When I set it up for the first time 3 month ago it drove me crazy. The very first time it found the Time Capsule right away. But when I discuverd a mistake in my initial setup and I went through the settings again to change stuff it suddenly could not find the Time Capsule anymore. Only after frustrating 20 times or so with turning wi-fi on and off several times inbetween did it suddenly find the Time Capsule in the set up menu. However, when I tried changing my security setting to WPA/WPA2 today to see whether this solves my other problems again it could not find the Time Capsule when I was finished with the settings and I had to give up/cancel. Why is that???

I would really appreciate some help here. But please I am not a computer gig and normally always had assistance with these things. On the other hand I am not all stupid either (even so these manuals assuming we all grew up sleeping on a computer make me feel stupid).....

Thank you all in advance