In the brewing science forum, read the primer, if you haven't: http://www.homebrewtalk.com/f128/bre...primer-198460/
1. I think it is typical to add the salts to the water. Gypsum and Calcium Chloride will disolve in the water. You may need to stir a bit, though. Chalk will not dissolve completely without some chemistry voodoo.
2. I would be suspect of "blends." You don't need to get complicated with water additions to make great beer. In fact, simpler water is probably a benefit.
3. I've been using RO water from the store. Its less than $5 per batch. An activated charcoal filter might get you where you need to be, though. One thing to watch for is chloramines. Not all filters do a great job at getting rid of it. Campden tables help with this.
Just a personal note on water chemistry from my reading. I'm no expert. So take it with a grain of salt *rimshot*:
There are really 2 reasons to add minerals. First is to adjust the mash pH. Second is for flavor. For almost all styles, you can almost certainly get where you need to be for the mash pH by using acid malt, calcium chloride, and gypsum. If you follow the primer, you will make good, if not great beer. Seriously, start there, and go forward in baby steps. Watch the pH of your mash. This will make a big difference.
As far as flavor goes, you have to just experiment. Err on the side of softer water though. Before you brew a recipe and add chalk, table salt, or epsom salts, brew the recipe with nothing but a bit of CaCL and/or gypsum. Add as little as possible to control the mash pH and see where you get. Then start adjusting a little at a time. You'll probably make great beer.
Trying to mimic waters of famous locations is kind of silly in most cases. Especially when the water is very hard. You have no idea what brewers do to treat their water. I'm pretty sure many German brewers would do all sorts of things to precipitate hardness out of their water before using it. One notable exeption might be Czech Pilsner. They use extremely soft water. If you want that style, I'd use RO. English beers might also be an exception, but I'd still argue that you should try them with soft water first and see if you like them. They might not taste super authentic, but I bet they'll be good.
Hope this helps. I've thought a lot about it and am no expert, but have determined that the KISS approach is most often the best. That an pH is important in your mash.