Comma separated list of items

Sorry, I am unable to understand what you want here. Could you please elaborate a bit further?

This is not possible in the Drupal 5 version.

With the 6.x-2.3 release (coming out soon), you can follow the docs about the theme functions mentioned in the README.txt file:

Menu block uses Drupal core's menu theme functions. However, it also provides
theme hook suggestions that can be used to override any of the theme functions
called by it.

- theme_menu_tree() can be overridden by creating one of:
- [theme]_menu_tree__menu_block()
- [theme]_menu_tree__menu_block__[menu name]()
- [theme]_menu_tree__menu_block__[block id number]()

- theme_menu_item() can be overridden by creating one of:
- [theme]_menu_item__menu_block()
- [theme]_menu_item__menu_block__[menu name]()
- [theme]_menu_item__menu_block__[block id number]()

- theme_menu_item_link() can be overridden by creating one of:
- [theme]_menu_item_link__menu_block()
- [theme]_menu_item_link__menu_block__[menu name]()
- [theme]_menu_item_link__menu_block__[block id number]()

For example, if you created a garland_menu_tree__menu_block() function, it would
override theme_menu_block() any time it was used by this module, but not when
used by any other module. Similarly, a garland_menu_item__menu_block__1()
function would override theme_menu_item(), but only for the first menu block in
your system (the menu block with an ID of 1).