ASP.NET 2.0, NUnit, and TDD

I got my website set up last night and got a real ASP.NET page pulling data from a database and writing it out.

I did the bulk of my web programming when web-servers were still steam powered (does the name "EMWAC" mean anything to you?), so my skills are mostly Perl-based, so I'm in search of a few opinions...

A few questions:

1) Do you usually build the website locally (using whatever the new desktop-only server is called) and then only copy it over when you're done, or do you work on the live site? (I think I know the answer to this one already...)

2) What's the best approach for doing TDD on website-based programs? I took a quick look at NUnitAsp, but I think I'm more likely to write a set of classes that sit under a very thin asp.net presentation layer, and do unit testing on the classes instead. What has worked well for you?

3) Any issues with using NUnit and Whidbey beta 2? I could never get it to run with Beta 1?

4) For the database, should I run based on a local database, use the real database, or just talk to a mock database?

5) Anything other comments about tools/development approaches?