1: When is it appropriate to use the chunking feature, and is it recommended even if it's not necessary? Why or why not?
At the moment the only real benefit from chunking is that you get more stable and bug free Flash uploader (without chunking enabled it wouldn't be able to show progress). If you disable chunking and do not use resize feature then Plupload will fail back to default FileReference.upload() method, for Flash runtime, which is not kind to sessions and cookies.
Another good point is that you can upload big files, even if server-side is limited to much smaller size.
Next major Plupload version though will have much more robust and handful support for chunks.
2: If you're using chunking, is it preferable to have lots of little chunks or fewer large chunks? What is a recommended chunk size?
It doesn't really matter, unless you make chunk size very small. I usually set it around 200-500kb for image uploaders, and 1-2mb for big file uploaders (over 200mb)
3: It's been said that HTML5 has to load the entire file into memory before it's uploaded. Is this true even with chunking enabled, or does it load each chunk into memory separately as needed?
Browsers currently do not support reading from files in chunks, so we load the file into memory and chunk it there. So - yes. It is loaded in memory, no matter are you chunking or not.
4: At this point, I can force my users into a certain runtime. Which runtime is the most preferable if I'm expecting files anywhere from 5MB to 800MB?
For big files it's Silverlight, but for 5-800mb all runtimes should work without problem.
5: Is there a runtime that works best with chunking enabled?
Flash does, as I already mentioned above.
If you want to see your issue fixed, do not report it here, do it on - GitHub.