Ka-50 Guide - Unassisted Flight 

From a really simple switchology standpoint, it lets you flip between autopilot and not-autopilot with one button press instead of three. The AP channels on + FD == stability augmentation, which makes for more stable, easily-controlled flight. Some say that turning those channels off makes you a better pilot. I think that's debatable even when it comes to pure flight control, but a combat-effective pilot needs to be able to control their aircraft for the purposes of putting warheads on foreheads. The Shark is a single-seater, and you'll have to split your attention between flying and shooting. Using the available flight assists to reduce fatigue and distraction, to allow you to shoot faster and more accurately, is the right approach, IMO. I'd rather have a wingman who can use the available tools to be more effective, than one with higher piloting skill on paper, but slower to actually get the job done. That said, it's probably worth taking a few flights with the AP channels off, just to see how differently it handles. It's quite possible, although uncommon, to have those stability augmentation channels destroyed by battle damage, and if you know how that will affect the aircraft, you'll be that much more capable of limping home for repairs.

Leave all 3 main SAS channels on at all times (pitch, bank, and heading.) When FD is on, the autopilot is off. When FD is off, the autopilot is on. (So, yes, to your first question.)