1) Answer: If you are a current PowerTalk user, you should run System 7.5 Update 2.0 and then install PowerTalk 1.2.3. Although PowerTalk may be functional after the update but before installing PowerTalk 1.2.3, the tested and recommended configuration is to update to PowerTalk 1.2.3. This presents one small problem. The PowerTalk 1.2.3 software is posted online and is included on the System 7.5 Update 2.0 CD-ROM disc but it is not included as part of the floppy disk set. So if you download System 7.5 Update 2.0 you should also download PowerTalk 1.2.3.
This procedure will preserve all existing PowerTalk settings, aliases, passwords, and so on. You should not have to touch any of the preferences files.
2) Answer: The gateways were tested for compatibility with System 7.5 Update 2.0. They were tested extensively for the System 7.5.3 release.
3) Answer: Direct Dialup and the other gateways are all manually installed, therefore the updates must also be manually installed. Each of the Direct Dialup or gateway installers can be used to install the software for the first time or update the existing one.