Yes it can hurt your engine to drive with a bad knock sensor. The knock sensor should be replaced as soon as possible.
Yes.
At highway speeds, YES!
That is the CMP or Camshaft Position Sensor. Driving it can and possible WILL hurt the engine eventually. The Squeaking is caused by the gear train being worn out. The CMP in this engine is tied into the oil pump for the vehicle. If the CMP Geartrain was to fail or seize (the reason why its beginning to squeak.) it will stop the oil pump and no oil will be fed to the vehicle. The danger is here, that on this vehicle when the Oil Warning Light comes on, the engine is usually damaged beyond repair. See Related question on how to change your CMP
Yes, you can do serious damage to the engine if the converter is clogged.
it adds a lot of strain on the engine especially if the drive train is directly under the engine. (front engine fwd, or mid engine rwd)
No. Your engine will turn more RPMS and your gas mileage will not be as good.
No it won't hurt the engine BUT you could get carbon monoxide in the car. Don't sit in a parked car with the engine running if your exhaust is bad - it could kill you.
It won't hurt the engine but it will hurt the catalytic converter.
Overdrive keeps your engine RPMs low when you drive faster than 45 mph Its there for fuel economy If you drive without OD it doesnt hurt anything at all except your gas mileage
Yes it will hurt and hurt severely. White smoke is almost always a sign of a blown head gasket or cracked head. Coolant is entering the combustion chamber and is also entering the oil system. You will destroy this engine if you continue to drive it in this condition.
Probably. Most regular gas has an octane rating of about 87. This adequate for an American V-8 engine, but not for a high performance engine. Prior to the introduction of unleaded gas, Regular was usually about 92 octane, and Supreme was between 95 and 98 octane. To get what used to be Regular gas, you have to buy Supreme now. I disagree. The answer is yes or no, depending upon whether Subaru uses a knock sensor on this engine. The knock sensor will modify the timing of the ignition to adjust for regular gas. You would then lose a little horsepower and mileage in exchange for the ability to use the cheaper gas. You can research this, or find an old school mechanic who can hear pinging or preignition, put a gallon of regular into your WRX empty gas tank. If it pings, fill the tank with premium and don't use regular, if it doesn't ping, use whatever gas gives you the price - mileage - performance compromise you want. You can mix portions of tankfuls and the knock sensor will provide an intermediate timing solution.
Yes it will. Remove the oil sending unit and start the engine and it will spray oil everywhere.