1) No distortion, its the same as when u open youtube in pc
2) Yes, if u open the music player through widget or cube shortcut, it'll directly go to the last played music
3) Yup im using the internal 2Gb memory..i think in Malaysia, they only sell the 2GB internal memory..ive called many samsung shop before i bought mine, they only sell 2GB version...maybe later they'll release the 8GB/16GB version
4) Till now, i dont experience any lagging when opening pictures, musics, videos..although i have a large sum of media files
5) I usually open all this website using my phone:
    - cari.com.my
    - tomshardware.com
    - therepublikofmancunia.com
    - youtube.com

i can say it render it perfectly, fast and same as using pc..BUT when i'm surfing youtube, it render the website a bit slow..maybe becos of many flash in youtube..maybe becos of that..