General Principles of making risotto
The important part of making risotto is that you're moving it around in a little bit of liquid, so you end up scraping of the outside of the rice, causing the loose starch to thicken the remaining liquid to a creamy consistency.  The overall dish should be creamy but not mushy, with the individual grains of rice still having some firmness to them.

As for your specific questions :

For details on preparation, see https://cooking.stackexchange.com/a/137/67 .

Most ingredients are simply for flavor.  The acids (wine or vinegar) change how starch cooks and can keep it from getting too mushy, and add some brightness to the dish, but aren't absolutely necessary.