I haven't yet had a chance to try multiplayer, but here's how the system *should* work:
1) NWN doesn't know the difference between single and multiplayer characters. Your single player campaign is actually run exactly like a mutiplayer campaign would be, only with your computer as both the server and only client connected. The only flags set on characters are whether they are locally or remotely stored. Thus, if they server you are trying to join allows local characters, and you've exported your single player character (done by pressing the "Save Character" button in the in-game options menu) then you should be able to use him/her on the multiplayer server.
2) Yes, your character will gain and keep levels and experience in multiplayer play IF the character is locally stored. You can then save the character and import him into a single player game, though you would most likely need to start a new single player game to do so. I do not think it's possible to use your single player character in a multiplayer campaign, and then have your single player character return to the exact same point he was at in your single player campaign. The reason being that the two campaigns (single and multi) are using two different images of your same character, since when you exported him/her, you created a separate image to be used in campaigns other than the current single player campaign.
3) When you play coop with someone online, the person starting the server must always create a new game for everyone to join in on UNLESS they are loading a multiplayer saved game, in which case you must control one of the characters already a part of that saved game (not your own character). Your character may not be the same level as the other players on the server, and thus you should look for a server that is starting a game in the chapter that you'd like to play in. Any quests that have already begun before you joined the game will not be in your journal, and your party members must tell you about these quests for you to know about them.
Hope it helps answer the questions.