There are a number of ways to avoid a stair-step in your join when you knit in the round. Probably the simplest is to slip the first stitch after joining, and thereafter work every stitch normally.
You can find a detailed explanation of the options available with diagrams at: http://techknitting.blogspot.com/2007/01/circular-knitting-3-in-1-techjoin_26.html
Knit
A foramen, which is a smooth round opening for nerves and blood vessels
Stockinette stitch is simply you knit the first round, and then purl the second and repeat. This puts all the knit stitches on one side and the purls on the opposite.
yes
You can if you seam up the side and it it is a great thing to do for beginners when you have the right pattern, which is the difficult part. Alternatively, if you do not wish to use circular needles you can use DPNs (double pointed needles) to knit in the round. Often in hat patterns which use circular needles you will need DPNs anyway, so it is good to have some of these when you knit in the round.
have a look at knittinghelp.com to learn to knit and join ravelry.com for help and patterns
You'd probably need to know at least one kind of increase and decrease, but they could both be variations on the knit stitch (aka you don't need to know how to purl). It's also best to work hats in the round.
Smooth & round.
Initially have one extra stitch in the row. When you join, knit the last stitch together (knitting 2 together, in effect) with the first one.
To achieve smooth round edges on wood when cutting, use a router with a round-over bit. This tool will help you create a smooth and rounded edge on the wood. Be sure to go slowly and steadily to ensure a clean and precise cut. Sanding the edges afterwards can also help achieve a smooth finish.
unite, stick, clamp, clump, marry
cable knitting, tube knitting, four needle knitting, knitting in the round, and a straight knit