Some people want to earn achievements on their own terms and might want to occasionally 'undo' some to unlock again and again. Same thing with statistics. It isn't cheating because neither provide an edge gameplay-wise.
Valve Anti Cheat works by checking if any foreign processes are injected into a player's local game binaries. This application does not do that; since it communicates only with Steam, a ban is unlikely. Just the same, use it at your own risk in case Valve changes things.
No.
The game awards achievement-related items only once. If you deleted an item and want it back, don't use this application, contact Steam Support instead.
Free.
The current release, Beta 1 (0.7.5), expired on June 10th, 2011. A second beta will follow which will enable the other app's other feature, the ability to reset and edit statistics.
No. There is an application called SAM which is similar. Unlike Reset, however, it's feature-complete and it works on all Steam games.
https://github.com/teamfortress/reset/issues
You can download this project as a gzipped tarball.