Does it read the ID3v2 tag or the v1 tag or both, with v2 taking precedence?

As far as I'm aware, the latter method is the case.

Hopefully having the text scroll across the screen will be something added soon

This has always been available as a display option - the artist and title scroll (unless they fit without scrolling) along the bottom of the screen, with the rest of the screen occupied by a visual of your choice.

I know it doesn't import Winamp playlists, but is there anything that it could import

Importing foreign playlists is something currently on the wishlist for a future version.

In the meantime, if you drag a folder into emplode it will convert your hierarchical directory structure into a corresponding set of playlists. You can't set up multiple instances in this way, but you can get all of your music into the player in a structured way with a single operation.

Rob