1) I see on the box that it says Windows SP2 is required. Is that absolutely essential? On my main music machine I have SP1 only installed and I don't want to update to version 2 seeing that they are essentially security updates and seeing that my main music machine is not connected to internet, SP 2 is not necessary. Plus apparently, SP 2 has issues with the soundcard I use (Creamware Pulsar) according to many users on the forums.
I had it running on sp1 for a while. It has been posted that the main thing you will lose is some of the video support.
2) Can I only install version 2 on the PC where version 1 is?
If you try to install on a machine without any previous version installed, it will ask you for your old serial number.
3) Seeing that the PCs I want to install Adobe Audition version 2 are not connected to internet, can I still authorise it with my internet connected machine?
You can phone Adobe for activation. Personally, I hooked up my recording machine to the internet temporarily to activate it.
4) How much better is version 2 compared to 1?
There have been a wide range of reactions to version 2.0. So, I couldn't tell you a definitive answer on which is better. 2.0 is substantially different. A better question would be, "Which version best suits you?"
5) How many PCs can I install it on? Ideally I hope 2 (for laptop and desktop)
Yup, 2.
6) What happenes if I reformat my drive. Will I have to apply for another authorisation, or is there a kind of key file generated that will always be the same and apply only to the particular PC?
If you know you are going to format your drive, you should probably de-activate it first (via internet, or phone). If for some reason you can't transfer activation prior to the reformat, then you could call Adobe.
7) How does the program compare to a program like Cubase, Logic or Sonar? Is it just as good?
That's a loaded question. Personally, I love Audition. I do have Cubase. Different folks prefer different applications. And some applications have different features (such as midi-sequencing). It all depends on your needs and your personal preference.
Will I be able to transfer licenses should I buy a new PC/laptop, which is what I will be doing in a few months?
Yup, transferring activation is easy (at least if you can connect to the internet). I've already done it once.