Here's a shot at it...from my limited experience, anyway:
1) In most cases, yes. The software could be easily updated.
2) Servers are typically just purchased in much the same way as they're configured and ordered by an average home user on dell.com (or other site). And the beauty is that the old server can still be used. You can purchase additional servers and 'cluster' them together (assuming you have the software to do that)...making them act as one server. Each server gets an equal share of the incoming web traffic ('load-balancing'). Also, if one server goes down, the site remains up, because you have at least one other up and running. As far as programming goes, it really depends on how extensive the site is, and how many programmers they've got. For a full e-commerce site (as this is), several months to a year could be an appropriate time-frame if they only had a couple programmers.
3) Testing can take a couple of months....and again, it depends on the number of testers and how complex the site is.
4) Some bugs are easy, and others are hard to fix...but how frequently they're found, is tough to gauge.
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