Correct although in fact it is actually the other way round, I.E the Fiesta borrowed the Focus engine as this was an all new engine exclusive to the Focus when it was launched.

Yes you can interchange the engines of the same type, I.E don't get the TI-VCT if you don't have already, sure it could be fettled to work but won't be a straight swap!

Bigger engine is very hard to do, I.E 1.8, 2.0 (Zetec-E, now Duractec) are completly different from the Jap derived Sigma you currently have!

Martin