I did this once on purpose. Spawned near Harun al-Rashid, and was on my way to taking his capital, which became my 4th city (but 2nd-most-important). Caesar was attacking him from the other side, so I marched 3 comp bows and a spearman down and took it easily. I had my first Great Prophet a few tiles behind them, for to found my religion there and more easily spread it outward. (Back-filling to my own cities would be easy.)
Unfortunately, Harun founded Islam there one turn (!) before I took the city. I immediately founded Catholicism there 2 turns later, but the city was still majority Islam. I had to burn my next Prophet to covert it, and it wasn't a problem after that. The 'internal pressure' from my religion being the majority was enough to prevent Islam from ever manifesting again - I never had to take any more direct action. It was worth it, in the end.
No, I dont think so, from what I have seen even if you use an inquisitor on a holy city the religion will come back slowly
Yes, UNLESS you found another religion there and make yours the dominant one (which takes two Prophets to do). Then the internal pressure of the dominant religion will naturally suppress the other one. If you found your religion somewhere else, the original religion of their holy city will always creep back, no matter how many inquisitors you throw at it. (The only way to suppress it then is to get Religious Texts and surround the city with 5+ of your own, plus maybe the Grand Temple and a trade route, so that the external pressure overcomes the holy city's internal pressure.
[edit] Hmm, Browd says otherwise, and he's much more experienced than me with this stuff. So maybe an inquisitor would in fact work.