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You will notice a bit of a step-down when driving it compared to the C3. Personally i don't like Fiat's at all anyway, from my experience they're crap to drive but if you like it then go for it. If you fancy it then at least it's your very own personal runabout.
I've drove one before and Its like sitting a shoe box! loads of fualts and not much room... Would be cheap as hell to tax and insure tho...
1.1 wont be too slow if you think about bhp/ton, that's what really counts.
depends on the mileage and if there's no service history then stay away
I agree with a few others here, I would take a good look around, and just for price guidance look at sites like the autotrader so you have an idea of whether you are paying a fair price. I'm not over keen on Fiat's, and although that car has many nice features like the central locking and electric windows, when they go wrong it's going to cost you. I had a Citroen Saxo 1.1 1998 model at one point, it was nippy, very reliable, low mileage, low insurance group, good service history, and around a year later sold it for exactly the same money I paid for it, so do consider other makes too.
Also find someone with mechanical knowledge to test drive it for you ;)
It's a first car and it's relatively cheap.
Insurance prices are going to be the same for most cars for you, so why not take it while it's there?