1. you can use cold water(not tap water) or formula to mix w/ cereal.
2. about adding ground up vegetables, I'm not sure about the taste.

3. you use a teaspoon to measure, depending on how much your baby eats. If it's his/her first cereal, try one teaspoon mix with water, make it same consistency as the formula, so the baby can get used to it. Then you can add more accordingly.
4. usually baby gets enough water thru formula, and doctors don't recommend to give babies water under 6 months old, they could get what it's called water toxification. Because the baby's kidney is not fully developed to get rid of water in the body. If your baby is over 6 months, and the weather is really warm, I don't think it's harmful to give him/her a bit of water. About sipping cup, I think it might be a bit too early to do so. Let the baby to get used eating cereal first. Again, some babies can start using sipping cup as early as this age, so it really depends.
5. if it's the baby's first cereal, I recommend you not to add anything, let him/her get used to just cereals, then you can add different things to it, including egg yolk.
Hope I answered your questions.
