Hiya.

So first question, yes we got to keep our levels. When I started 2.0, I started with everything at 50 already.. only had to level up scholar/summoner.

I was also able to carry over whatever I had in my retainers and my character's inventory. Most of which was worthless/replaced mind you very quickly. Alot of other things such as all materia (if I recall) had turned into un-aspected crystals that we could turn in for materia of our choice.

Actually for some of us (my boyfriend had the 2.0 normal intro where he is on a wagon) however I simply appeared from wherever we had been whisked away at the end of 1.0.. appearing in the middle of nowhere and made my way on foot to the nearest city. Not sure why some legacy players didn't get the custom 'intro' but that was it, other then that.. and a few lines in multiple quests inferring we look familiar, there really wasn't much of a different between a legacy 1.0 character and a fresh 2.0

And finally yes, Seeing I had all 50s when 2.0 started, I started the 2.0 MSQ as a lv50 though all instances/dungeons had level caps. Just the overworld it helped.