What is the optimal steep time for cold-brewed coffee?
I've been using a Toddy for about two years now.  I have found that you can get a plenty strong concentrate with only 1/2 pound of freshly ground coffee steeped in filtered water (like in a Brita) for just short of 18 hours.  Beyond 18 hours the grounds become waterlogged and the same elements that produce the bitterness found in hot brewed coffee start to come out.  12 hours, though, is barely enough to get the flavor out.  At only one or two hours, I can't imagine that there would be much flavor at all.  If you use a Toddy, you will find that using a finer ground will result a very cumbersome, frustrating draining process and/or sediment in your concentrate.    As to the caffeine, I believe you will find that the matter is undecided.  Someone needs to conduct an experiment with well defined parameters to really figure it out.