2. Under the pcblib-newlib directory, there are two locations for the
1206.fp footprint; 1) geda and 2) generic. Is this a problem and how
does PCB handle this?
PCB doesn't. When you load from the library, you specify exactly
which one you want. Once it's loaded, there's no reference to where
it came from any more - it's embedded. gsch2pcb is the other way to
get footprints into your design; I don't know what algorithm it uses
to choose.
You're right. I was referring to gsch2pcb.