1. Mine has only been recalled for the ECU so far (first recall I've ever got... then again it is my first car)
2. There's 2 "Performance Edition" of the Corolla 9th Gen, the typical Corolla S and the Corolla XRS...
The Corolla S is pretty much the Corolla CE in almost all aspects, BUT in addition has a body kit, sexy black interiors, chrome interior parts, white 'sporty' gauges, 15" Alloy Wheels, Fog Lights, and of course the spoiler.
The Corolla XRS has all the Corolla S's additions (excluding the white gauges) and also 16 in" Alloy Wheels, better suspensions, an extra set of gears in the transmission and last but the best of them all the 2ZZ-GE engine (also found on the last Celica GT-S), which is FAR superior from the Scion tC, Corolla XRS (10th gen)'s 2AZ-GE engine.
3. Yes you are correct, it has 126hp but some are reported to have 132hp on the 9th gen Corollas (but those are probably the 2003-2005 models), mine went to inspection today and it got 135hp on the Dyno for some reason.
4. Well most people treat the Corolla as a cheap car that'll get you from Point A to Point B (it kinda is), so the car might MAY been abused horribly, just make sure it stands up straight and has no problems moving around, then you'll be fine.
I drive a 2008 Toyota Corolla S, originally meant to get me from Point A to Point B, but now added with style