Yes teams are allowed, you will just have to fight amongst yourselves if you win the prizes .

There is no file size limit as such, because I would expect to download the entries from the competitor's websites. Just make sure you use high compression in whatever archive format you choose to use.

Yes you can defeat the other opponent by completing a task. I think dog fight implies intense game play. Usually that would entail a battle to the death, but I agree that is could be 2 opponents trying to complete a task under duress.