Ok, I'm a newbie to underwater photography but been doing photography for a long time. I've got some questionls I'd like to ask rather than do a lot of trial & error while on vacation (going to Maui on Fri). These questions pertain to snorkelling only. My gear is a Canon A610 with the Canon underwater housing.
1) Is condensation in the housing a problem? Are there any precautions I should take to avoid condensation?
I use a defog for plastic on the inside of my lens port window, don't use the same stuff as your mask.
Go to TAP Plastics and get the Novus #1 Plastic Clean & Shine, it's a antifog, antistatic, and dust repellent for $2.25 USD. To pick up any droplets of moisture I use one of my wife's kotex pads laid down underneath the camera body. You can cut the kotex to fit what you need. If it does get wet, replace it with a new one since it will swell up after absorbing the water.[/b]
2) I'll be using the camera above and below water while in its housing. What's the best way to keep water drops off the port while above water?
You can wipe with one of those Sammy towels, or keep your rig submerged in the photo dunk bucket. 
3a) Is using the built-in flash generally a bad idea? I'm considering using it for photos of fish at a distance of maybe 6 ft or less.
Depends on how clear the water is. Usually any particulates will light up as backscatter right in front of your lens. Since the internal flash is fixed and right in front of the lens you have no way of avoiding it. Use a external flash that will be slave triggered, it will require that you block off the internal flash so it's just used for triggering the external flash.
3b) The housing came with a white translucent panel for diffusing the flash. Under what situations would this be recommended? I'm guessing it's only good for macro.
I used my diffuser for a wider spread in clear water as fill flash.
4) I plan on using the Underwater WB mode. Will I end up with a lot of noise due to the heavy signal amplification used to adjust the colour channels?
Try it and see if you like what Canon developed. I don't like it and just use AWB on auto.
5) Focus: do you recommend AF or MF? If MF, how should I set focus? My distance estimation, when wearing a mask underwater, seems off. So, if I visually perceive that something is 5 ft from me, is it really 5 ft from me? Do I set my camera's focus distance based on my perceived distance or based on an adjustment to my perceived distance?
Depends on the model of Point and shoot you have. In MACRO, I use manual Focus if my subject lets me, everything else I use autofocus. It's too hard to see on the tiny LCD enough details to determine that your shot is NOT in sharp focus unless you spend the time on zooming in digitally on the image and evaluate. Sometimes your metering choice will give your image a soft focus look. While in manual focus mode you should still be able to see the LCD magnified area if it's sharp or not. It's not like the old manual guess the distance type camera
Thanks in advance for your replies.
larsbc