Question about Vacuum, Index, perfromance, future xml support in postgresql

Dear Guru, I have lots questions:

<1a> As said and recommend vacuuming postgresql database
daily/frequently, I do see the increasing of performance.  BUT why
does postgresql designed in such way not freeing used storage to "gain
the benefits of multiversion concurrency control"; it seemed to me as
a bad design from start for postgresql, why, oh why? Will "VACUUM" be
obsoleted in the future as postgresql improves?

<1b> It is said in postgresql documenation docnote that Vacuum does
not give back the storage of Dropped index, it suggested to reindex
frequently ( it does not say to reindex table or reindex index?) Is it
true? if yes, why is it designed as such?

<2> This is really confusing, I read a book about database design in
DB2, It said it is best not to allow indexing in a table where table
rows are frequently insert/update/delete because re-indexing is
costly, is it correct for all circumstances? Does creating Sequence
(SERIAL) suffered costly re-indexing in Insert statments as well?

<3> Why do we need manually tuning database for perfromance when we
know database optimizer generally smart enough to use proper type of
join?

<4> Will postgresql adds feature for XML, XQL/Xquery, in the future?
(oh, if postgresql will not, will mysql do? )

As you see,I am really a newbie and donno much on the database field,
please answer this questions. Thank you so much.

Kyle Cheng