1. Yes, you can share folders as well as files. Don't forget to use proper folder structuring to keep everything organized! :-)
2. When you say "upload 250GB of files" do you mean you have 250 gigs of files on the hard drive that you plan on connecting? If so, you're not actually uploading anything, you just need to let the Pogoplug process the data. If I had to estimate, I would say 1-3 hours for it to do that. Anytime you plug a new hard drive into the Pogoplug, it will need to do this. I once plugged a drive into mine that had about 100 gigs of stuff on it and it took about an hour to process everything. Best thing to do is plug the drive in right before you go to bed. By the time you wake up, it should be all good to go!
3. The only time your internet connection speed matters is when you're using the web UI, OR using the Pogoplug software from outside of your LAN.

Hope this helps!

Anyone with access can share files with you. For example, I live in Manhattan, my mother lives in Florida and isn't a very tech-saavy individual. I created a folder for her and gave her full access to that folder. Now, whenever she wants to share a picture with me, she just drags and drops the picture into that folder and i can see it right away. She doesn't have a pogoplug...only has access to a folder on mine.

What is your internet connection speed? If your internet connection has a slow upload speed, then people trying to download from your pogoplug will have issues. Also, I've noticed that things tend to slow down if there is a lot of activity on the pogoplug. So if he's trying to download while you're simultaneously trying to transcode a few movies and backup a local hard drive, it may be a bit slower than normal. 7 Kbps is definitely not normal.