a few random questions off the top of my head

1) for the first time hostelier, with limited funds, which would be more practical, buying an existing business... or renting a large property and kitting it out... i believe the latter would involve alot of red tape... but worth it?

Renting a property would be harder work but depending on the deal you strike could be cheaper and you will get a bigger return for the bigger risk of starting a new business. Landlords are motivated at the moment and may be willing to pay for fit out costs

2) facts and figures... footfall, competition etc... where do you guys source your info?

hostelworld (competitor rates, review, numbers) national stats buros, local tourism associations, possible industry partners

3) number of beds... providing you can have an adverage ocupancy of 60%... what's the least amount of beds you'd want to have to turn a profit? is a 10 bed hostel too small?

IMHO yes to small. But it's up to you. If you are going to run it every day on your own you may make some money to sustain you life. I guess the question is - is money or lifestyle your motivation and how much do you want to invest. If i was an owner operator and had money to invest i would look at 50 to 100. If i was and owner and employing a manager i would want 200 beds and would not consider anything under 150 (depending on rent of course)

4) staff.... i've been in many hostels... and the staff can make or break the place... how do good hostels have good staff.. higher pay? or they just higher the right people?

Again IMHO the right people, managed the right way and incentivised (not necessarily paid high) in the right kind of way

5) when you see a hostel for sale... what are the chances they're just trying to get rid of a lemon?

Good chance... do your research well and make sure things stack up to your model. Also remember lemons some times be made into sweet lemonade. Just make sure you pay bugger all for the lemon

6) what are the best extras that can help bring in revenue... ie: internet, tours, bar etc...

All of those are good, Laundry and vending as well. bars are really hard work and lots can go wrong but the rewards are there when done right,