1) Does it set a time for how long the ad will last?
Payment and duration are not tied together but yes there are multiple durations to select
2) Can I allow members to post for free, but charge a set fee if they want to include a photo?
NO not without code modification
3) Is it possible to charge a fee for highlighting the ad by including it on the front page as well?
You can charge for highlighting but putting it on the front page of your site would be upto whatever code you write. We support our files and code which would be say within your classifieds directory.
As for the buyer review, is it limited to only those who has successfully completed the transaction to write the review? If the review is writeable by anyone, then it wouldn't have as much trust worthiness.
anyone can review a user if they know how to get there but usually a user who buys a product is giving the feedback url. You can moderate all feedback from the admin panel
Are the photos uploaded by member when they place the advertisement hosted on ClassifiedPost, or PhotoPost?
They are on your server
1. How easy is it to adjust the templating system (colors, fields displayed, page width, header and logos, etc).
Very easy you can do so in most all cases right through the admin panel
2. How many photos can you have per classified ad?
6 is the current limit per ad