Formatting would really help me to read this. But here goes:
I'm in the process of creating a guide for folks that are new to the platform at the suggestion of one of our devs :)
Re: testing - those are required fields. If we allowed them to be used or not used just for testing, people would publish apps and forget to put them in. We have had people getting their apps rejected over and over for publishing without a description and icon. This way, there's no mistake or error when you REALLY go to publish.
Re: Images - We have stated over and over in the forums and I believe in blogs as well that we used to have scalable images, and now we don't. Again, you're right this should be in some kind of guide.
Re: Installable checkbox is only for apps that are external. This is why you lose the ability to edit your app if you uncheck this box. You shoud recieve a warning saying that we're going to delete your app source if you do this.. and give you the option to back up. The reason for this is because "external app" means exactly that. The source is hosted EXTERNALLY so you should not need to edit your app. (I'm in the process of creating a blog post to explain this. Again, this does need to be documented.) That's the kinds of apps that have no sources.
Re: urls: leave blank for no callback - that should be documented on the tool itself. I'll look into putting that somewhere.
Re: Oauth: http://developer.myspace.com/community/myspace/oauthintro.aspx