go to the iTunes store and look in quick links, it will say redeem. Click there and go ahead!
No, you can not.
Go to the app store and use you iTunes card to get apps
No, you can just use your own credit card.
You can use an iTunes card for purchasing apps at the app store. Maybe your card still has a value of $40 because you downloaded a free app.
Nope too bad
No. You need an Apple App Card to purchase Apps from the App Store!
At the store
As a consumer, you don't start out with a 'freebee' or credit balance. Most App Store accounts have a credit card attached to them, and are limited only by the credit card's credit limit. If you use an Itunes or App Store gift card, it is a credit based on the value printed on the card. As a developer, you only make money when a paid app sells. You get 70% of the selling price you set. Apple gets the other 30% for hosting the app, approval and quality control and account management.
Yes, you can use iTunes Gift Card money.
Go to the iTunes store on your computer and click redeem, open the gift cards category. Enter the code on the back of the gift card. The from your iPod you can download the app or search it in the iTunes store from the computer and Sync your iPod afterwards.
No, you will not be charged.
In the iTunes or App Store apps there is a Redeem button at the bottom of the page which is used to add an iTunes gift card.