Well this thread seems to be about dead but I'll post anyway.
As teddy stated earlier, journeytoforever.org is a great site to learn about the basics.
A couple of points though;
Any good biodiesel won't have any methanol in it; therefore it is not miscible with water. Although it is possible to degradation to occur, it generally takes longer than 6 months. And even then there are additives that can be used to extend the shelf life.
Any diesel engine can be run with a blend of up to 20/80 biodiesel/diesel (B20) with no modifications. Newer engines can run at B100 with no modifications and some engine manufactures are starting to extend warranties to cover the use of biodiesel.
The largest warning related to using biodiesel is that it possesses strong solvent properties. When an old vehicle starts to use biodiesel breaks up deposits left by petroleum diesel in the fuel system. This causes frequent changing of the fuel filter until the lines are cleaned out. The benefit, however, is that you’ll be left with a sparkling clean fuel system.
While straight vegetable oil can be burned in a diesel engine there are several problems related to its use. The viscosity vegetable oil is several times higher than that of diesel fuel. This causes flow problems in the fuel system as well as difficulty starting. Using regular vegetable oil also causes thickening of engine oil over time as some VO leaks past seals.
As far as cost goes, the U.S. government is in the process of passing a subsidy on biodiesel that will make it competitive with petroleum diesel. However, this sidesteps the capability of people to make biodiesel in their own backyard for as little as $0.60 per gallon.
If anyone has any questions feel free to ask. It is my name after all
Mr. Biodiesel