1. Yes, if they are sharing the same IP address it is very easy for the folks at Google to see what you are doing, especially if you are cross linking...not good.
2. The issue you are having is big in terms of being bad for site relevancy and duplicate content issues.
3. Here is my suggestion. Use www.pair.com developer account, set up each site in its own sub-folder in your www directory within your pair account. Then spend the extra 5 bucks to buy a dedicated IP address from pair for each site.
There are other, more complex ways of doing things with different IP's, multiple c-class's, but generally Pair's solution is good enough unless you are doing really spammy things.