1. You get a perfect clone of the pokemon you choose. Meaning, its not made from scratch or from hacking. If you choose a Charmander, the selector has as the default the exact same Charmander you would get if you started FireRed and chose Charmander as your starter. There will be absolutely no difference at all.
2. There is no risk involved at all when using the selector, since it you get the pokemon just like if you had caught it in the wild.
3. You can breed the pokemon you get from the selector, and you won't get a bad egg. This is because they are just like the pokemon if you caught it in the wild.
4. You can set it to give you any item you want, and the item is a perfect clone with no problems with it as well.
5. It can't make Shinies.