Complete Beginner with some Rudimentary Q's

Hi,

My interest has been spiked recently through a friend of my girlfriend who trades Forex. As such i've started reading up on various aspects of trading and having a little experience working in finance.

I recently downloaded a Pepperstone demo account but i'm really struggling with some of the fundamental aspects of the interface and the actual basics of how it works.

As i said, my knowledge is very basic & my plan is to have a crack at a demo account for a few months to see if i can get the hang of it. so.......my first question is

1).....if my account is loaded with AUD, how/is it possible for me to even complete trades with USD/GBP or EUR/USD? surely i would have to actually have that currency to start with in order to make the trade. or is it the case that i can only trade with AUD?\

2) why does the buy/sell price always differ slightly? is that because when selling it accounts for a brokers fee or is it something else?

3) if for instance there is a AUD/USD trace at say, 1.4023, is that always against $1 of the base rate or the currency you hold in your account?

4) can anyone recommend any other good Demo accounts?

Thanks for any help you can offer, i know my questions of very basic but this is something completely new to me and i'm only really looking to trial trading to see were it goes,

thanks