Wrong. DNS servers are not going to handle non-ascii characters. IDN extensions will be entered into the root DNS servers like this example:
.xn--0zwm56d (IDN enabled applications will translate them to UNICODE)
Wrong. The effects of a few thousand missing domains from the daily DNS queries is similar to the effects of a few thousand missing grains of sand from a beach.
I seriously doubt it. The only thing that is going to increase the workload on DNS servers is more internet users. If IDN extensions didn't exist, they'd be visiting ASCII extensions at the same rate. The ones who are currently visiting ASCII domains aren't going to start visiting twice as many domains per day just because there are IDN extensions - a person only has so much time in a day to surf. What will happen is that certain groups of people will simply start visiting IDN domains instead of ASCII domains, more and more over time.
You may see some older people who have never used the net before get on when IDN.IDN becomes available, but I doubt that this number will be huge.
.