These are Magic Items. They are mentioned in the rules on page 11 (Leftovers). They were meant as a small surprise, so they are not mentioned in the online version of the rules.
These items are for a special game variant. Rules for this variant will be found soon in the Dungeon Lords section of the www.czechgames.com web pages.
No. The dummy player does nothing. It just blocks one space of three different actions.
During development of the game, there was a rule that the dummy player took the leftmost monster (or ghost) when placed on the Hire Monster order. This rule was later abandoned, as it was too restricting and players tended to forget it, but if you want, feel free to use this rule.