Steephie, i think the answer to most of those questions is, we're not sure (though they do replicate). This is new.
But from what i can gather they replicate by infecting amoeba.
They can be seen under a microscope and have thus probably been mistaken for bacteria and ignored for years. There is some suggestion that they could have the same origin as the nucleus of a cell (the bit that contains all the nuclear DNA, and is thought of as the control centre of the cell) - notice not all cells have a nucleus, eukaryote cells do (this includes all animals, plants, fungi and amoebae) prokaryote cells do not (Archaea and Bacteria)
But this could all be guess work at the moment, what we know about the evolution of Archaea, Bacteria and Eukaryotes is limited to about 3.6 billion years ago, and it seems likely (to me) that before this we have viruses, prions and other types of proto-life which we currently don't know about (either because it doesn't exist anymore, or we haven't found it yet)