1) Yeah, quite a lot of people. Most people that come into kitbashing after they've been involved in GW stuff will start out with the paints they've already been using, which makes perfect sense. Personally I use a few, but I have a larger selection of other paints which are better value, so I only really use them when I want a specific colour. But if you're coming into the hobby from GW and you already have the paints, then yeah, they'll do the job a treat.
2) Not at all. For one thing, you've got the broad categorisations, mostly between hobby acrylics and artists' acrylics.
Hobby ones are usually of a single cream sort of a consistency, and are basically designed to offer a good rate of flow while still maintaining a decent coverage. This the GW sort of thing.
Artists' acrylics are the ones in tubes that come out like toothpaste. Excellent for laying on canvasses in thick strokes, but obviously they can also be watered down as much as you need to.
Then of course there's the differences between different brands. They'll vary fairly widely in consistency, quality of coverage, colour range, and price; and people have their own preferences. I couldn't really say which is
the best to go for; I'd just recommend trying a few different types (a couple of colours each to start with) and seeing what you like best.
3) Tamiya and Testors are probably the two most-used brands for kitbashing, but they're far from the only ones. For those that prefer to spray, Krylon Fusion is well-regarded as one of the best for painting plastic. It bonds to the surface of the plastic, and once it's cured (about a week or so) it's pretty much chip-resistant. But availability is limited; I think there are only a few places outside the US that can obtain it, and unfortunately the UK isn't one of 'em.
Games Workshop paints are also pretty common; like I said, quite a few people who kitbash also game, so they use the paints already in their collection. Also, many people have limited access to craft stores, but GW is pretty well spread out nowadays, so most people seem to have a store not too far away.
Personally, my main pick are Inscribe Hobby Acrylics, which have good coverage and are really good value (at 99p for 59ml, they're about 10x cheaper than GW - five times as much for half the price).
The only paints I'd really advise
against are Anita's, which while they're in the same price bracket as Inscribe, I find have very poor coverage and adhesion (and I think ThunderThruster and Sonray will back me up on this...
).
Hope that helps.
When I can find decently priced paints locally I might give it a shot at repainting some of my movie toys. 
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