Here's my take:
1) What is Ultimate SEO URL in the new CRE release and how does it differ from the previous SEO friendly URL you had in the last patch?
USU is basically the old oscommerce seo url rewriter ported to (cre) loaded.
What's Seo Friendly Url? Which patch / version of cre loaded does this appear in ?
2) What is the advantages of 'ultimate seo URL' over the previous seo friendly URL?
If you're talking about an old oscommerce contribution under the SEO Friendly Url, then read this:
http://www.oscommerce.com/community/contributions,27963) Will 'ultimate seo URL' contain the categories in each of the product URL's on a web-site or will the URL only contain the product name and leave out the categories in the URL?
Shows either category name or product name, not both.
4) If possible, so I can see how it looks, please give an example of a site or just a few URL from a 'Ultimate SEO URL'?
www.mystore.com/catalogue-one-c-1.html (this is a catgeory called category one)
www.mystore.com/sub-category-one-c-1_2.html (this is a subcategory called 'sub category one' in 'category one')
www.mystore.com/product-one-p-1.html (this is a product called 'product one' which is in sub category one)
Simon