An absolute URL points directly to a file. It displays the complete address. An example is http://mysite.com/images/me.jpg. A relative URL points to a file/directory. It only shows a partial address such as images/me.jpg.
When you manage your files through the Files Panel it will update the links on your page for you.
Index.html becomes the landing page or home page of a website. It is the page that comes up when you just enter the main URL of a site.
XHTML 1.0 transitional.
They perform the same general functions but there is a move in web development to seperate content from presentation. The <em> and <strong> tags are semantic expressions of the text and <b> and <i> are aesthetic expressions. The aesthetics of the content are now being focused towards CSS and not XHTML.