Coins can be thought to have two different values, their numismatic value, and their precious metal value. Coins in less than pristine condition may have a higher value related to their precious metal value than their numismatic, or collectors, value.
Coins should be stored individually in enclosures that protect them from the elements. PVC-free mylar flips or acid-free envelopes are good choices. The environment that your coin collection is stored in should be dry with a constant temperature.
Not always. Coins with errors should first be examined to determine whether the error is due to an alteration made after the coin entered circulation, or if it is a true error. Values of coins with errors are based on the rarity of the error,the severity of the error, and the denomination of the coin. Of course, demand for a coin with that specific error is also a huge factor in determining the value.