I would NOT use the poly bushing. I installed it thinking, hey, i'll never have to do this again, and I HATED IT. It makes your car vibrate like a bus. I went back to the rubber OEM mount.

That said, 1) yeah, just cut through the whole thing and scrape off the stuck on rubber with a knife - you don't have to get it ALL - just enough to get the new one in. They say to use a hacksaw, but I found a sturdy knife worked a lot better. 2) yes - there are alignment markings on it. the arrows point up. 3) I suppose you could oil around the edges or something to help slide it in, but really your best motivator is brute force.

This might help you - this is what I followed to do it:
http://www.matthewsvolvosite.com/2009/10/01/replace-upper-engine-mount-w-oem-bushing/

It's much easier the 2nd time around, once you figure out how to get it in place right - very frustrating the first time.