1. It probably only weighs and ounce or so more than a regular watch, so no, it does not screw up the arm motion.
2. I can't say with absolute certainty that it measures accurately in hilly terrain. However, it does measure elevation changes so it may be fairly accurate in the hills. I live in Colorado Springs and run in the hills almost all the time and have found it to be fairly accurate.
3. I have the 201 and it is very easy to use and program.
4. I think it's close to 98% accurate - maybe even more when running on a completely open course.
5. I had the Timex S+D prior to the Garmin and I like the Garmin much better. It's much nicer having everything in a single unit.
6. The 201 will automatically record mile splits. I also like the history function and the logbook.
7. As others have said - you would be better off spending a few extra bucks and getting the 201. The rechargeable battery holds a charge for about 15 hours. The Timex I had was limited to about 4 hours. I bought rechargeable batteries for it and had to recharge almost daily.
Another thing about the 201 (not sure about the 101) is that Garmin updates the software inside the unit and you can download the updates free. As they keep improving the technology you don't need to get a new unit constantly.