1. Video playback is crappy because HTC neglected to include the drivers for the ATI Imageon video drivers so the DirectDraw is crap and nothing you can do as of right now is going to fix this. There is a way to play Video smoothly though. Install TCPMP and go into the menu and change the file associations to support AVI and then switch from the DirectDraw to the RawFrameBuffer. Video plays great for me like this. I have fill length movies on my phone and they play smoothly.
2. Word can save large files. Try storing them to the 512MB storage card that came with your phone or a larger one if you have one.
3. Pie is only slow because the processor is unable to render the pages quickly. Think back to the days when you had a computer with a 400mhz processor and 128MB or RAM... Same scenario. Pages will not load that quickly in PIE.
4. If you have installed the version of Opera that came with the new Diamond ROM(build 1126 I think?) it cannot be uninstalled and you will need to hard-reset in order to remove it. At least that is to the best of my knowledge. I have noticed the same thing.
5. Installing FlashVideoBundle along with TCPMP and configuring the settings to play flash video will add an extension to PIE so when you click on a video it opens TCPMP to play it.
6. As far as the yellowish hue you are seeing in the screen, you probably have one of the bad screens being discussed here:
http://forum.ppcgeeks.com/showthread.php?t=26742
If you are looking to upgrade your ROM to something newer and better then you need to refer to this thread here:
http://forum.ppcgeeks.com/showthread.php?t=24979
Heed the warnings and read very carefully before proceeding with the upgrade. It can be fatal to your phone if you screw up somewhere along the line.
Hope this answered your questions and should you decide to upgrade, Good Luck!!