To start staking all you need to do is deposit your LQTY token to the Liquity staking contract. Once done you will start earning a pro rata share of the borrowing and redemption fees in LUSD and ETH.
Your LQTY stake will earn a share of the fees equal to your share of the total LQTY staked, at the instant the fee occurred.
No, you can withdraw your staked funds at any time.
You can only stake LQTY tokens. LUSD can be deposited into the Stability Pool instead.
No, staked LQTY are not used to backstop the Liquity system and are not used for governance as there is no Liquity governance.