1:

Would cause A'A in (3.11) to be noninvertible.  See blog.

2:

The lm() call is lm(y ~ .,data=ivl[,-(1:2)]).  Departments 10 and 12 
seem to have a mild impact.

3:  

See blog post on man page for predict.usrData().

f <- function(ud,itm,usrItms,usrRatings,k)
{
   datum <- list(userID='',itms=usrItms,ratings=usrRatings)
   predict(ud,datum,itm,k)
}  
      
library(rectools)
getInstEval()  
ud <- formUserData(ivl[,1:3])
print(f(ud,468,c(1,12),c(5,3),6))

4:

B Inv(A'A) A'D