Ceppo, here goes.
Most of your questions revolve around the difference between QNH and 1013.2 millibars (1013), which is the standard pressure altimeter setting. QNH is a local altimeter setting that will register your altiude above mean sea level. This changes all the time, sometimes several times in an hour, to take account of the prevailing air pressure.
Because these local altimeter settings can and do change as you move along your route, it would be impractical for instrument traffic to keep changing the setting of their altimeters as they passed through each altimeter setting region, and this is why the standard atmosphere pressure setting is used. When you are using this pressure setting you are now flying at a flight level and not an altitude, unless of course the local altimeter setting happens to be 1013!
A transition altitude is a local altitude below which there are terrain considerations to be dealt with. So, the higher the surrounding terrain, the higher the transition alt. Below this alt, if you are using the local altimeter setting (QNH), your altimeter is giving you a reading based on mean sea level, which is what the terrain is measured against, and so is the most useful altimeter setting.
Above the Trans Alt, terrain ceases to become an immediate consideration and as you pass this altitude (depending on your SOPs), you then would set 1013, and fly to a flight level.
If you are cleared to climb to a flight level, and your altimeter is still set to QNH, then you are in danger of conflicting with other traffic, eg if the QNH is 993mb, and you are cleared to FL 100, you will level off at 10000' on your altimeter. If you then realise that you are on QNH and wind on the extra 20mb (assuming 30' per mb), you will wind on an extra 600' to your altimeter. In other words you are 600 feet too high and you have just bust your altitude so ATC will file a report!
The reverse is potentially more dangerous. If you are cleared to descend with a procedure to, say, 2000 feet, and you still have 1013 set, and the QNH is 993, you will level off when your altimeter reads 2000. Then you wind off 20mb, and you find that you are at 1400', and you have seriously eaten into your terrain clearance margins. This one makes your sphinctre twitch. Hopefull you only do it once, if at all, and realise it quickly enough.
I hope this is clear enough an explanation, and that I have my facts straight. It was a very good question!
The MCP on a 75/767 is the panel in the middle under the coaming and it is from here that you select the autopilot you want, and the particular way (mode) in which you want to fly the a/c through the autopilot. You make altitude/FL selections here, speed, heading, vertical speed, autothrottle, and lateral and vertical navigation selections. I may have missed some! Hope it helps.
[This message has been edited by Wilfred (edited 30 April 2001).]