Thanks for the questions, I love these kind of queries because the answers are always suprisingly positive
1) No royalties
2) Still no royalties
3) It has happened once from version 2.28 to 2.30, but it was only an $50 upgrade, and before that, and after that there has been hundreds of versions for free. I think, an upgrade fee is only needed when there is major addition in features to the engine, which makes it step to another level of consciousness (which was the case with 2.30 since it introduced realtime and visual programming with Lua).
4) $50 is the only example we got so far
5) It can not only support all game genres, but it can also do much more than games, like simulations and applications, or why not also some cool 3D multimedia demos which you want to show to your friends. It's not tied to anything, although some features are indeed FPS related, but they only make FPS development easier, and don't stop you from making something completely different.
6) Yes
7) No, but you can do it easily yourself (sqlite3 db, like firefox does), since expanding the engine is a no-brainer. The engine is made to be expanded, because it gives access to all core functions with a very easy interface.
8) 3D World Studio is a separate product, but I use it too, since it's the best solid geometry modeller I have found. For hollow modelling I use Blender.
9) The network API in Leadwerks is merely a simple one, but it works fine for casual needs (like counterstrike types of games, with no more than 64 players). For commercial grade and heavy networking I would suggest RakNet, which also many people have succesfully added to Leadwerks Engine. There are also specialized MMO solutions which you can use with Leadwerks Engine and are much faster than RakNet (I have the source code for one).