For Question 1:
Imagine you are VFR for a moment. If you were to see out your window that the VOR is East of your position, then that simply means you are west of it and to (TO) get there you should fly east. Therefore, your RMI will point east as the head of the needle points to the station while the tail gives your position.
A FROM on your OBS, always think of it as your position in relation to the beacon/reference. A TO indication means you should fly East to get to the VOR, FROM means you are LOCATION about of the VOR. If your were to twist the OBS until it shows FROM and then you fly to the VOR your old conventional VOR receiver would be Reverse sensed. HSIs don't sensed revered.
Q2
DME (Distant measuring equipement) not a GPS.... is measured in slant range. The closer you get the larger the error as your aircraft height is more of an issue. So RNT11 dude hit the nail on the head for you answer.
Last edited by BlueSkyLife; 13th Jan 2013 at 16:14.