[Clipper]

It looks like Andrew might be doing something as he edited your post, but I'll give these a try anyway:

Originally Posted by AdmirableAdmiral

1. Does Driver's Ed Training provide a +1 to Steeds?

I can't say for sure not seeing the card, but the Vehicles are Steeds and Steeds are Vehicles description seems that it would make this clear.

2. Can a Cowboy with a Vehicle Equipped win the game by reaching level 9 (by killing a monster)?

Seems so.

3-5. Can a Vehicle be Smart? Even the Swiss Army Knife? Can Vehicles/ SAK carry the Saddle Bags?

Yes for 3. The other two I'm not sure, but use the Vehicles are Steeds and Steeds are Vehicles rule.

7. I bolded the word penalty, in this context is it referring to the Bad Stuff, or the minus x to Run Away?

The minux X to Run Away.

8. Is the Jackass the only Steed (I have) that can be sacrificed (or prevented from being sacrificed by being a Smart Ass), or does the FAQ over ride this?

It seems this might have originally been a mistake, or perhaps an oversight as the card seems based on Smart Pills from The Need for Steed. However, we do have that sacrifice on a penalty rule, so it would seem it would block that and MunchkinMan said the same thing here. Note that if there are any Steeds that provide a +1 to Run Away, then this can still be considered a penalty if your character has +2 or more to Run Away without the Steed, so it would stop you discarding that Steed in that situation too.

9. If an Item card is normally two handed, but becomes Steam-Powered, does it get the +2 or +3 bonus from having Unlimited Ammo?

Sorry, can't find the effect of that card, so I'll have to leave this one for others to answer.

10. Can Item modifiers be switched from Item to Item on the owner's turn, outside of combat, or are they locked to the item they are originally placed on? (eg. Incendiary Ammo, Unlimited Ammo, My Grand Pappy's, Steam Powered, Silencer)

Item Enhancers are locked unless they say otherwise.

11. Does the inclusion of a flame Item in your equipment or the use of a fiery one-shot make your whole combat flame, or just that bonus? This is important for Monsters like Tumbleweed/ Loco Weed (fire attacks do x2) and Killer Jalepeno (immune to fire attacks)

No it doesn't. Only the fire based bonus is doubled or zeroed. Note that the whole fire bonus is still fully doubled or zeroed if there are other monsters in the combat, though.

12. The TGTB&TM cards that I have been considering Guns (for Munchkin Impossible compatibility) are: Belt Buckle Gun, Shotgun, Six-Gun, Seven-Gun, Gatling Gun, Derringer, and Blunderbuss. My friend tried to argue that the Civil War Cannon should count as one too. I pointed out the difference between missile weapons and Guns. Can someone here make the official call?

The Cheat With Both Hands rules say this:

Originally Posted by CWBH Rules

Any card with Gun in the name, or that obviously indicates a firearm (such as the Big Black .45 from Munchkin Fu), is a Gun.

Cannons are not firearms, so it wouldn't count.

13. What is the deal with Undead? Do they do anything other than the Cleric interaction? I've heard they work like the "In Black" cards, where they can freely join eachother, but I can't find any rule on it.

This is a fairly new rule that is being added to new printings of each set. The errata pages for each set with Undead monsters show you the new rule. E.g., the errata page for The Good, the Bad, and the Munchkin say:

Originally Posted by TGtBatM errata

Add a subhead under "Monsters," on p. 5:
Undead Monsters

Several monsters in this set are tagged Undead. You may play any Undead monster from your hand into combat to help any other Undead, without using a Wandering Monster card. If you have a card that can be used to make a monster Undead, you may play it with a non-Undead monster to use this rule.

14. Are Traps and Curses always interchangeable, even if a card mentions one by name but not the other (Like Ambush)?

Yes they are. The CWBH rules (one of the best places to get info on Blending, BTW) say:

Originally Posted by CWBH Rules

Curses and Traps are the same kind of card for rule purposes, and any card or ability that affects one will affect the other. Specifically, a Wishing Ring may cancel either a Curse or a Trap, no matter what the specific Wishing Ring card says on it.