Will the condenser (nitrous) be uploaded to clients' GitHub? (i.e to where client can make edits and continue to develop and enhance the site?)

I've not requested that but I do know the condenser code is available at https://github.com/steem-engine-exchange/nitrous

Can client host the condenser on his own server or is all hosting done by you?

I do know you can host the server software yourself. You can find it at the github link above but I'm not sure how that affects ENG levels.

The '1 ENG payment per user (per month)', is that 'staked ENG' or does client still have to send in the 'liquid ENG' each month. Assuming it is 'staked ENG', how does the billing really work? For instance, how does a client know how much ENG they have to stake, at the start a month. Now, assuming SCOT served 1000 active users on the first month and 1000 ENG was staked as payment, what happens the next month, if '1000 users were active again'; will the client need to stake another 1000 ENG (meaning 2000 staked ENG for 1000 active users, for two months)? 

I should be able to answer this completely but I'm honestly not 100% confirmed on all details.Here's what I do know:

It requires delegation of 1 ENG per active user, as defined by a user who is staking your coin, for each SCOTBOT instance. This doesn't include Nitrous which is another 1 ENG but I'm not sure how hosting your own instance works on that.

What I'm not sure of:

How "billing" will be processed. I imagine there's going to be some kind of portal that shows you what level of ENG you need to cover your tokens and how much you have staked / delegated to you. I've not yet seen anything along these lines but have to imagine that is in the works.

I see that there is a basic default-condenser (nitrous) that is delivered when a client pays the required ENG..... Is it possible for a client to request that some additional basic-features be implemented on the site, before its delivery e.g a pop-up, a video-embed area etc?

I don't know this for sure but I would think there can be arrangements for extra custom work on a condenser for an additional fee. I have no clue what the pricing would look like.

Can a client integrate SCOT into an existing non-nitrous-site? Can you help client get that done? Is payment for this done in ENG? Is there an estimated cost in ENG for this? 

I would reach out to @aggroed on this part. I know that @tokenbb has been integrated and that there's going to be some kind of integration with @dtube so I'm sure it's possible. That being said I have no clue what it would take.

How flexible is SCOT smart contract? Can changes be made to it? For instance, is it possible to setup an experimental SCOT instance, issuing a small portion of the entire token supply first or does one need to issue the entire supply at the outset?

You have to set a max supply for your currency but you don't have to issue any at all until you want to. You can always go issue more up until you've reached your max supply. As for the way you'd like for SCOTBOT to distribute the tokens can be changed for a 100 ENG fee.

Hope this helps a little!