1) Lowering your shields is not a good idea, especially on broadband. There are lots of script kiddies out there and zombie computers just port scanning away at IP ranges. A simple firewall is unlikely to deter a focused and skilled attack, but they help screen off the fluff attempts at trashing your PC "for free".
The reason you are seeing better throughput with Bittorrent is that it uses multiple connections to pool transfers, thereby increasing throughput. When you make the initial connection you handshake with the 'seed' and then the torrent takes it from there, opening more connections to satureate your download rate, and opening more connections out to satisfy the download requirements of others. If your firewall does not recognize these new connections as legitimate they will be blocked and, as a result, you receive a lowered download rate (twofold: fewer connections open and BT uses a give-take recipe whereby you get more down the more you offer up. Of course this happens in a staircase fashion so you should normally not be greatly affected). I do not have problems saturating my download rate (lowly 512Mbit) through my ADSL gateway.
2) Disconnections can happen for various reasons. This also depends on how you are connected protocol-wise. If you are using PPPoA (PPP over ATM) or PPPoE (PPP over Ethernet) you are most likley making a 'dial-in' connection and these need to be refreshed. Typically a PPPoE connection will require 'dialling' software on the PC and will only establish a connection to the ISP when needed. PPPoA has a similar idea, but there is no dialling software associated with it. Most gateways/modems have an option to 'keep connection alive' whereby it will automatically dial and maintain the connection every so often (also definable).
Another problem you may be having is with hackers. Certain models of gateways (with a certain software/firmware) tend to disconnect if they are pounded on by a port scan. This will make the connection reset or other strange things may happen, forcing you to reset your modem. It would be useful if you stated your gateway, any network equipment you are using alongside it, and any software then may be involved (especially if you are using a dialler).
3) If I were you I would leave that MTU well enough alone. Many people have got it in their head that changing this value increases their network performance (in various scenarios). Most of these peole don't really understand what they are doing so they simply repeat this tweak. The Windows default should be fine unless you are operating in unusual circumstances. Changing the MTU is really only useful if you change the MTU of the entire network to match. MTU has to do with how large segments of data are allowed to be and there are tradeoffs to having large packets. That said, the Internet, being a gigantic network, is more or less set on "auto". 1500 is actually outside the original TCP/IP spec, but it is a simpler number to remember and this number is negotiated along the route anyways. Changing it on your PC is unlikely to have any effect unless the network is designed to operate "way out of wack"(tm) and you need to follow suit.
Basically, your lovely ADSL connection should work with zero configuration from your side. It should call in, get its configuration data from the DHCP, and give you a smooth ride. It obviously isn't and you sound sure that your physical connection is fine so youshould provide some information about the hardware in use and any connection methods (ie: what gateway are you using? what configuration have you made to it? what firmware is it using? are you using WiFi? etc, etc).
EDIT: I just wanted to add that if you are using PPPoE then you definitely do not want to mess around with MTUs unless the ISP is telling you to set a very certain value. More generally, a large MTU can decrease performance because you start at the top (1500, for example) and if that packet segment length is deemed too long it will begin negotiating down until it reaches a successful size, wasting transfer time. There is so much more to this and even some truths are actually lies, but we need to screen off reality to make it manageable. Furthermore, are you changing MTU on the PC or on the gateway/modem? If you change it on your Windows PC, for example, and not your modem, you would be talking 1500 the distance between the PC and modem, and, perhaps, 1498 between the modem and the ISP. This means all packets must be resegmented by the gateway and...well, that should be fine and normal, but you never know.
