(1) for my amateur level, would I be better off with a body and small lens in a kit form..or buy the body then the lens separate?
That depends on a variety of factors. Your skill level is only a small part of the answer. You're going to continue to improve, right? So buying good gear is a wise investment, usually better than starting off with cheap gear and having to upgrade.
Bigger factors are your budget and what you want to do with the camera and lenses.
Budget is typically the biggest factor. If you can't afford it, the best lens in the world isn't going to do you any good. So your choices will be limited by how much you can spend.
What you're shooting also matters. For example, let's say you shoot weddings. In Nikon gear, I'd suggest the full frame D700 or the D3 if you can afford it. All 2.8 lenses of course, and one of those 50 mm 1.4 lenses as well. The full frame camera allows for wider angles and better low light performance.
Shooting wildlife or sports? Then I'd probably suggest the D3S. It's a DX (crop sensor), so your 70-200 lens acts like a 105-300 lens on a full frame camera. This magnification helps you pull in your subject. The D3S also has a nice fast frame rate.
> just talk to a good reliable gear shop and find out what
> they have to offer and use some instinct..
I'd do plenty of research before you get there. The sales staff may or may not be informed. I've had a salesman try and sell me a used lens that was "a good deal" only to later find that a new one was only about $50 more. Then again, other advice at the same shop has been spot on in my opinion.
Check various websites, read up on things. You'll find differing opinions, but you'll also usually see a general concensus.
So that said, I want to find a basic all around lens for most conditions. but like some say here, you will never be able to find a lens universal for everything..right?
Well, you're basically right. Nobody has come up with an 12-500 f 1.4 lense that also does macro and tilt shift, sells for $200, collapses down to 3 inches for travel and weighs 6 ounces. The laws of physics also seem to imply they won't be developing one any time soon either.
For that matter, you can't even find a universal body. As I mentioned above, different sizes mean different compromises. Full frame does better in low light. Crop sensros make your lens have more reach, but also make your wide angle less wide. The more megapixels you have, the more noise that is generated. Ever wonder why many Nikons are only 10 or 11 megapixels while many Canons are what, 15 or 16? Nikon chose lower noise over higher megapixels. It's always a balancing act.
However, back to the "one size fits all" lens... Nikon makes an 18-200 zoom lens. I'm sure Canon makes something comparable. It's a 3.5 to 5.6 I think, close to that anyway.
That lens will work just fine for the vast majority of what you need to shoot. No, you won't be shooting weddings with it, at least not in dark churches with no flash allowed, and you won't be using it to zoom in on mountain goats on distant ridges, but for general shooting it's a wonderful option. I'd venture to say that 75% of my shooting uses that lens. I go to my other lenses when I'm in low light and/or I need the image to be as sharp as it can possibly be. The 18-200 is reasonably sharp too though, and I've printed plenty of gorgeous 8" x 10" shots from it.
I would venture to say that a photographer could buy a good body, either Canon or Nikon, an 18-200 lens, and have a pretty capable setup for most types of shooting. It's a lot like buying an SUV, it's not a sports car, and not a pickup truck, but for general purposes, it works just fine.
