Please familiarize yourself with uscis.gov and http://travel.state.gov/visa/visa_4354.html. Additionally, based on the nature of your questions, I would suggest that you consult with a qualified immigration attorney to assist you int he process. Best of luck.
Is the marriage legal? Seems like it. Whether it is fraudulent for immigration purposes, that is another story. That said, hearsay in the general sense of the word is not always a reliable indicator of an individuals intent.
To be honest, this question may be more appropriately placed in the family law section.
Once her 149 is approved and priority date is current you will be able to adjust along with her. In the alternative, if your employer is willing to file for you then let them. There is no telling whose labor cert will be approved, if at all first.
Assuming your step-daughter is under 21 and you married your wife prior to your daughter's 18th birthday, then yes you can petition for her and she will be eligible to adjust status. The fact that they are overstays will not in and of itself make them ineligible for adjustment of status. Consult an experience immigration lawyer to determine if there are any issues with your case. Best of luck!
The fact pattern you present reeks of preconceived intent. Your fiancé should file a 129f for you and if approved you would apply for a K visa. In the alternative, the two of you could marry and the he could petition for you as an immediate relative and if approved you would proceed with consular processing abroad.
Get letters from friends, neighbors and your parents. Additionally, you two can write a letter explaining the situation with her parents. Hire or at minimum consult an experienced immigration attorney to assist you.