a) "dd" is already on the player as part of the developer build?

Yep. It's a very low level command for Linux users, similar to having ls, cp and such around.

b) It will work with the command lines you described regardless of the number of drives or model of player?

Correct, since the dynamic data is always on the first (/dev/hda) hard drive.

c) You are backing up to a loose file on /drive0 and then later making a copy of THAT onto the PC somewhere?

Yes. I choose drive0 since it should have enough space to hold a 32mb file. To restore, the user would have to put that file back on the empeg somehow.