A quick rundown.

Preps are fairly easy to get. They allow for stronger attacks, or in the cases of guns, allow for more accurate attacks - the shot between breaths and the like. It allows prevents people from spamming attacks. Case in point, me and Frokane could have went longer, but without having to prep, he was basically dead in the water against Kusanagi and Kei'taro. 

The more preps you have means the stronger your attack is. To equal this out, preps can go into defense, which - if equal - can negate a fairly strong attack.

As far as damage to the arena, that comes as it does. People could start including potential arena damage, if they should miss; but usually it doesn't actually become a problem. If it does, then the players can talk it out, or call in a judge - similar to most problems. 

Combos can go as Verb asked, with potential follow up attacks. In fact, many people actually do that. The problem comes in when people, as mentioned, try to send off 100000 attacks in a single post. Hence, interrupts. I stop your second, it doesn't matter how many times you said he'd attack - it's all dependent on the former being successful, and the second being stopped, means the third doesn't happen. 

All in all though, it seems it was more or less handled. Nothing has really been hindered, in many of the fights I saw, by the T1 rules; once understood, it actually keeps the fights logical, and forces people to plan ahead, instead of

X sends of three magic beams of asskickery, without any actual preparation or any real reasoning why. And they can continue doing it post after post after post.

But the most important thing is, both parties can sit and come up with their own ruleset for their fight.