1 : The only way to overlap UVs properly in my experience has been to move them point to point on top of one another.

2 : In Blender, a "light map" is basically a full render, simply place point lights around the model and do a full render bake, then use that as an overlay for your texture.

As for your question about baking in detail, you're on the right track, and this all depends on your workflow. Personally, I've started using Zbrush to make sculpts, within that program i do retopology, and then use xNormal to bake my maps. Most of the detail in my textures comes from using one of the channels (usually green) from the bent normals bake.

Also keep in mind, the texture size limit is what the game compiles the texture file down to, for example, I've been working on some items that require a 256hx256w size, however, while authoring the texturing, i've actually been using 2048hx2048w, which the game will accept and automatically change when you submit the item.

This is my (mostly) work in progress set for Clinkz, i originally submitted the bow without thinking I would make an entire set to go along with it, but once it got in i decided why not, so heres how it looks at the moment.

Also, just curious, is there anyway to bring animations in to Blender for these heroes? I'd love to be able to pose them but have no clue how.

http://i.imgur.com/BRg3Y.jpg