Migrating Cluster Instances To Stand Alone Install

Hello all: looking for some general advice on proper approach. looking to move databases off of a clustered instance to a new (non-clustered) server.
Got several issues i'd like some advice on.

1. This is an OLTP instance that's been around for a while & it's pretty well encrusted with apps & processes that attach to it. Therefore it would be a very good thing if we didn't need to change the connection information in several hundred places after the move.
I've tested one approach to this that seems to work: moved the instance to a server which has the same name as the cluster resource associated with the clustered instance and an instance that has the same name as the clustered instance.
For example: cluster install is aiproddbproduction, moved it to a box called aiproddb with a named instance called "production". There's a bunch of tedious network stuff that has to be done to make this work (binding an IP address to the MAC address of the new box and some murky DHCP reservation fiddling), but after the network crew got done cursing me it did finally work.
Does this seem like a reasonable approach?

2. What's the best way to transfer security info to the new instance? I used the transfer Logins DTS widget but had some problems with it not being able to find some groups in AD.

3. what's the best way to transfer DTS packages?

4. is it necessary for the new instance to be at the same patch level as the old instance? the old clustered instance is still at SP3 and i threw the latest SP4 on the new location. good/bad/indifferent?

5. i was planning on taking a full backup & restoring it to the new machine. Is there a better way? Is the wizard for copying databases a good thing?

Those are these issues i'm aware of and have given some thought to. There are probably things about this i haven't considered and would appreciate some word on.

thanks,
Garth