With the 2.3b Lite+ you can do it either way. Keep in mind this chip has bios capacity of 1mg and it should now have cromewell in it. This means that if you replace the 1mg with anything else whenever you want to change it you will need a programmer.
The way I did it, I loaded only 512K in bank one with the cd, this way if I ever want to change it I boot from bank 2 which still has the cromewell load 1mg of cromewell and then load 512k to bank 1 of what ever I want again. This is the only way I know and saves from having to buy the programmer which by the way is a great tool to have but do not neceseraly need it if you are carefull.
With the cd's you can easily load any bios you want, I learned from one of the tutorials and since I use windows xp what I did was to have my bios ready plus my dummy file and used xp just copy it to my cd-rw, works great.
Question two, I would try first to fit the chip to the motherboard according to the tutorials without using the fiberglass pen, in my case it worked fine, but I do not know whether I was lucky. The 1.0 to 1.3 it's a bit harder to set up I noticed, because the green led just flashed briefly and stays off but, if you switch to cromwell boot up and the tray opens you do not have to look back, you are in business.
System 1.5 the minute the chip makes contact with the d0, the green led will come on and stay.
For the fiberglass pen is just that, a pen like with a fiberglass in it and you use it like trying to erase something from the motherboard in this case you are trying to get the lacker of the contacts so the points make better contacts. Look for it at an electronic supply store.
Here's a nice tutorial, I do not know if is the same one you used. Good luck.http://www.teamxecuter.com/x23b_liteplus_method.htm