1. They are XML only.
2. The prefixes means that if you want to add a new unit in a non-modular method, you add it to
Assets/XML/Units/CIV4UnitInfos.xml. If you want to add it in a modular method you add it to
Assets/Modules/(Whatever)/*_CIV4UnitInfos.xml. Prefix in this case means whatever you place in there as "
*_". The primary reason for this from what I understand is to keep the files from different modules from having the same file names, and thus cut back on the possibility of files overwriting each other. Though the folder structure will typically be used to ensure this.
3. AFAIK the modules do load in Alphabetical order. I know we tested it once, I can't remember what the result was. Pretty sure it was Alpha though. And yes, the order is VERY important
4. You can only add or modify, though in the process of modification you can essentially remove something from the game (graphical only, no stats, unbuildable/selectable, yadda yadda). But you cannot directly pluck something completely out of the game without using nifty tricks like that.
Now, all of that is about Modular Loading as designed by Impaler_WRG, who was then hired by Firaxis to implement it in that manner. The boys over at
WoC had worked with him, and continued the work beyond when he left the group and expanded on it CONSIDERABLY. In their version you are able to make a single line of a single entry be an entire module, and I am reasonably certain that you can control Python Modularly as well (you don't actually modify the python modularly if I am remembering right, but rather you change which Python file you are using for the game, and can redefine that midway through any game. I am probably remembering wrong though, because it sounds way awesome).
When I get back to town in about 2 weeks I am planning to continue my work that I started a couple months ago of making WoC modular loading work for FfH. I put the project off because they were working with the 3.17 source code directly and I couldn't access that information since I don't have an NDA agreement with Firaxis (though I would LOVE to get one... just can't figure out HOW).
So ideally they will have the new WoC out this weekend, and I will get some time to review it while I am on vacation, then I can hopefully merge it over in short order when I get back, and write up a nice tutorial on how to use the new method (and hopefully convince Kael to use the imported code for the main mod)