I'm curious as to why you say this? I received a free account from 1&1 several years ago and was not that impressed.
Their shared hosting is substandard and not at all optimal for ListMail, due no doubt to the large # of clients and resulting abuse, however their dedicated servers are top-notch.
1. Will 1&1 allow mailing large amounts of email in a short period of time?
With a dedicated server you can send as much email as you like. Only your reputation is affected. There are very few limits to what you do with the server.
2. What do they use for their control panel, and mail setup - is it procmail, or some other variety?
The servers come with Plesk management software to easily set up the server, your domains, and client domains. Plesk uses qmail mail software which I've found to be very easy to use. Client control panels with tons of great features are also included with Plesk.
Here's a demo:
http://www.swsoft.com/en/products/plesk75reloaded/demo/3. Is scripting allowed by parsing email coming in?
It's your machine so
everything is allowed. Parsing incoming email with CGI script can be done with a qmail email alias. These are very easy to set up but you must be the administrator (root) and do it from the SSH command-line. The only drawback I've found with setting up ListMail on Plesk is that these cannot be set up by the client.
4. How good is there support with this $100/month dedicated machine?
$99/mo is unmanaged. You can get managed servers for $109/mo but customizing the server settings and making administrator-only changes is much more difficult or impossible.
5. Do they provide re-starting, or does the end user have to monitor the machine?
You should/must monitor your own machine and you can reboot the system in case of a crash within 20 minutes via their web-based control panel. They also provide booting into rescue modes so you can recover you data manually in case your system won't boot.
I can set up an unmanaged root server for you including a multiple IP patch (IPs are $1/mo each), an off-site backup script, mail/mysql optimization, nameserver setup, and more for $300. I will 'manage' your server, applying ongoing system/security/monitoring and Plesk updates for $30/mo.
I recommend no more than ~700,000 users on a single list in ListMail with the lowest-end server. You can push upwards of 750,000 emails/day out of the server if you like.
Regards