Offstone definitely has a few Contax G2 users, and there are a few other G2 users lurking in this website too! Maybe you might like to get a bit closer to them, and try out their G2 before you make that decision as it is hard to describe the how the G2 works.
Pertaining to your questions, here are my opinions.
Focusing dial - I have not tried the focusing on the G1, but I have read many times over that the G2's manual focussing is a big step forward over the G1. Already, manual focusing with the G2 is wierd, so I am not too positive about the G1's manual focusing ergonomics. The dial that you see on the front of the G2 is indeed the manual focus wheel. When you switch to manual focus, all you get is a display in the viewfinder, which shows a 'how much in focus' scale that corresponds to where the camera is aiming at. When you rotate the dial, nothing happens to the lens. Only at the point in time when you press onto the shutter release button will the lens focus to that distance in which you have set. Remember that the G2 is a rangefinder, and the electronic rangefinder is found at two windows at the front of the camera. If one finger accidentally covers the window, your focusing goes off.
Focusing via the lens - Regarding the question about the two textured rings on the lens, one is for the aperture, while the other is used to mount the lens onto the camera body. The way in which G lenses are mounted onto the camera body differs from your SLRs, where the whole lens turns. In the G lens case, only the mount turns. Having said this, you cannot focus with the lens manually.
Reliability - I had two bodies before, one was a second hand and the other new. I do not remember that the two bodies performed differently. Also, I did not have any problems with the bodies. One thing to take note of. Tithes does not have a good record of providing good after sales service. If your G lenses or body breaks down, they will send you camera over to Japan to have them serviced, for a fee of course. This can take up to two months, as I have experienced with a Contax Tix.
Focusing point - To be honest, it is one of those problems that I have never experienced, but have read. I think that it is similar to a PnS. If you don't understand how to use the focus with a PnS, you will have problems with the G2 cause both cameras are somwhat similar in this aspect.
G1 - In my opinion, the G2 is better. As I have mentioned before, I have never tried the G1, but I have heard that the G2's focusing is much much faster and accurate.
As for the lavenderlilz's question, technically, I think the answer is yes.