I would recommend CM10.1. I have been using it for maybe two months now with no issues.
Yes, EVERYTHING will be erased after you root. So put your files in your laptop before starting.
No, your camera will still be 1.3MP. The camera app that comes with CM is much better though. And actually, I'm using the 4.3 camera, and using the volume keys to take a shot is very nice. Shots are more stabilized.
There's not really a risk in rooting and flashing stuff unless you use the wrong files. But make sure you do the IMEI fix correctly, otherwise your phone won't be traceable like ever if you decide to install a program to do that. You also risk someone coming up to you demanding to have their phone back... And yes, I'm being dead serious about that, hahaha. Someone got their Fusion stolen with the wrong IMEI info and someone put another SIM in it.
And yeah, you'll be able to move from CM9 to 10.1 easily. It's just a wipe of the system partition mostly. The lock bug isn't an issue on those ROMs.
And no problem!