[Jack Simth]

1) Try an ISDN line - more expensive than DSL, and less effective, but available basically anywhere they've got phone lines.

2) It's an option, but you'll need some tricks to be able to get in contact with the other end at that distance - a directional antennae, specifically. They aren't too difficult to make, but a hill in the way will put that option right out, and weather (specifically, moisture in the air) will utterly kill your reception. Also depends on what else is between you and your target - especially electrical things (power lines, houses, and so on). Trees are also very stopping (due mostly to the water). Speeds will mostly depend on how much interference you're dealing with, and how good your side and their side are.

3) Depends. Mostly on the type of wire (use plenium for maximum distance with traditional cable, but there's other options). You can also set up repeaters (if you've got a power source - a simple hub, essentially) for longer distances, although it will introduce some latency. Also: Signal degradation usually just manifests as a lower connection speed - your computer generally will automatically retry packets that don't make it.

4) Sounds painful.