1) You should always use the range that is closest (yet higher) to what you're measuring. But depending on the multimeter it may select a different range automatically.
The tolerance may be higher in the 200K range when you measure below a certain resistance, probably 20K in your case (I'm guessing your MM has a 200, 2K, 20K, 200K and 2M range).
Best way to rule out any other possibilities is to measure a couple resistors that are not in a circuit, that way you'll know if it's your MM.
Lets say you measure a 10K resistor with a 5% tolerance, it should measure between ~9500 and 10.500 Ohm (9450 and 10.600 or so is fine as well, your MM has a tolerance too, depending on the range and the quality of your MM the tolerance varies, not to mention contact of the probes, quality of the probe leads...).
Sorry, can't really help you with the other questions as I still need to RGH my first 360 (Have a JTAG'ed 360 myself, and only work on consoles for friends, neighbors and the like).
PS: Edited my previous post, forgot to mention something.