"(1) One of the projectors-probably the forward view is going to have to hang closer to the ceiling than the other two...can this be corrected either by tilting the projector, keystone correction or with the software."
It's ok to adjust with keystoning a bit before adjusting in pre-warp. It makes sure as many pixels as possible are in the screen area. Every bit extra you can get into the projection height that isn't lost outside the screen is helpful. Keystone on projectors can help with that in many cases.
"(2) If some of the images spill off the screen do I make it smaller with the minus key or just use control points to drag the corners into the screen...what is the difference?"
The projection that spills off the screen is just lost pixels. No matter what you do you'll lose some resolution off screen or with the edge blend area. It's standard for correction of a flat projection onto a curved surface. Just make sure you have 100% coverage of the screen and at least 15% overlap for the edge blend. It's preferable to lose as few pixels as possible outside the screen, so be mindful of your mounting locations to account for the optimal location.
"(3) Do I warp and blend at the same time or warp the image, save it and then blend?"
I warp and blend at the same time. The picture above should give you a good idea of the 15% size for the blend. Just keep on fine tuning the blend until the red stripes are on top of each other in the edge blend area.
"(4) Finally should I physically move the projectors to get the red lines into place when overlapping the images? Any help is appreciated and I hope this makes sense."
No, the only moving that really needs to be done is initially making sure the screen has full coverage and that you have at least 15% overlap. No need to be perfect on this, just get it roughly into the ballpark. The pre-warp and edge blend will take care of the rest.
Be mindful that no two screens are the same exact configuration, so there is just as much an art as science to configuring. I'm in the process of writing up a new configuration manual. Any input you can give on what content you'd like to see would be useful.
-Brad