The setup only runs once, basically a self extracting binary.
Yes you must have the SD card plugged in, all the programs reside on the card
When SD uses PAW for its traffic source it also uses the PAW GPS data - I must admit, I am not sure I like this, in RunwayHD I think it still uses the internal/BT GPS, for AirNavPro and EasyVFR it is configrable.
In SD it is hardcoded, hmmm
So in summary, SD will use GPS from PAW.
if PAW is using a GPS device itself, that is the source, if it is using CollisionAware/NMEA-GPS, then it is whatever the iOS is providing