1) Apollo will use the WebKit browser engine (Safari also uses WebKit).
2) Apollo uses an xml manifest to indicate the application entry point. The content value appears just be the mime type (text/html, shockwave-flash, etc). This means there is no binary / specialized bytecode generated for Apollo apps. You write straight up ActionScript / MXML/ HTML /ECMAScript using the the Apollo API’s for any "desktop" functionality you need.