-- There is no problem with it, except the fact that it will keep getting bigger, until you re-initialize the file. I usually take log backup in to separate files and delete it after moving to the tape

-- You can create the database if you want to before restoring but you have to choose the option to restore over existing database, the best thing for you to do is specify the name of the database while restoring, it will create the database( Don’t forget to change the path here, the drive letters may not be the same on both servers)

-- After the restore go the QA and use sp_change_user_login @Action = ‘Report’ , it will show you list of the broken logins. You need fix those login. For more details pls refer to the Books online (search for sp_change_users_logn)