Joomla! runs on the PHP pre-processor. PHP comes in many flavours, for a lot of operating systems. Beside PHP you will need a Web server. Joomla! is optimized for the Apache Web server, but it can run on different Web servers like Microsoft IIS it just requires additional configuration of PHP and MySQL. Joomla! also depends on a database, for this currently you can only use MySQL.

Many people know from their own experience that it's not easy to install an Apache Web server and it gets harder if you want to add MySQL, PHP and Perl. XAMPP, WAMP, and MAMP are easy to install distributions containing Apache, MySQL, PHP and Perl for the Windows, Mac OSX and Linux operating systems. These packages are for localhost installations on non-public servers only.
The minimum version requirements are:

• Apache 1.x or 2.x
• PHP 4.3 or up
• MySQL 3.23 or up

For the latest minimum requirements details, see Joomla! Technical Requirements.

You indeed can change the Menu Item's Type to whatever you want, even after they have been created.

If, for instance, you want to change the Blog Section of a Menu link, go to the Control Panel->Menus Menu->[menuname]->Menu Item Manager and edit the Menu Item. Select the Change Type button and choose the new style of Menu Item Type from the available list. Thereafter, alter the Details and Parameters to reconfigure the display for the new selection as you require it.

Installing of Joomla! 1.5 is pretty easy. We assume you have set-up your Web site, and it is accessible with your browser.

Download Joomla! 1.5, unzip it and upload/copy the files into the directory you Web site points to, fire up your browser and enter your Web site address and the installation will start.

For full details on the installation processes check out the Installation Manual on the Joomla! Help Site where you will also find download instructions for a PDF version too.

No you don't. Versions of MySQL lower than 4.1 do not have built in UTF-8 support. However, Joomla! 1.5 has made provisions for backward compatibility and is able to use UTF-8 on older databases. Let the installer take care of all the settings and there is no need to make any changes to the database (charset, collation, or any other).