After the beer has fermented you would transfer it in to the keg and not bottles right.?
Yes, rack from fermenter to keg.
Now, where do you set the CO2 to carbonate the beer..?
I set the CO2 pressure at 30psi. Or if you meant to ask where the tank goes, you can put the CO2 tank inside the fridge or outside, but the beer should be in the fridge and cold.
When do you turn the CO2 level down?
After 36-48 hours, you turn the CO2 down to about 10-12psi.
How long can the beer last in the keg?
Light beers last 4-5 months, but higher ABV beers will age better and be good up to a year and longer. Light beers and dry hopped beers are best consumed within 2-3 months IME.
When I bottled my beer each bottle had a small amount of yeast at the bottom, does this also happen with the keg..?
Yes, but the amount of yeast in the bottom varies based on your process. If you have a long primary or use a secondary there will be very little yeast in the keg. It doesn't matter anyways, because the first pint or two you pull will be a bit cloudy. After that, you should have clear beer.