My understanding of the rule is that the property wouldn't be capital gains tax free because it was an investment before. You would need to proportion the amount of time it was your ppor vs an investment to calculate how much capital gains tax you would pay. The longer it remains your PPOR the less capital gains % you will need to pay when you sell.
Nope - if you can prove you lived in the house at the start, before it became a ppor, as long as you have no other ppor in the following 6 years you can claim the property as your ppor (even if it was rented out for 5yrs 11mths) so no capital gains.
When the 6 years is nearly up you can move back in, out again, rent it again and restart the 6 year period.
The catch is that you cannot claim any other property as your ppor during the 6 year period (asides from a 6mths changeover if you sell and buy something else to move into) ... so only one property is ever cgt free at any one time.
http://www.ato.gov.au/corporate/content.aspx?doc=/content/86191.htm