Yes, #1 is true. I actually had a debate with some guy on this issue and found a website with some data log to confirm the result. On top of the fuel you saved by shifting into gear, the extra engine braking will reduce brake wear.
Normally I downshift to 3rd gear under such condition and let the car cruise at 2000rpm and 80kph. You don't want to use very low gear either, high rpm = more engine wear
The little you save can cause you more expensive repairs in the long run.
When you're shifting from N to D before going up the hill, you *can* lose traction on slippery condition. Even on dry road, it may cause a crash when you do that while turning. I'm not sure on this, but when you suddenly shift from N to D at such high speed, you can/will damage the transmission.