1 - When dealing with 3.5, it seems I can only use 'look up...' for creatures when I launch the program from the RPtools website. If I open the program directly from the downloded program, the button is grayed out. Any reson for this?
Not sure why that would happen. I've had it happen the other way around though. It should always be on. You might want to try and reset Init Tool from the Help menu.
1a - When dealing with 4e, the look up button is grayed out regardless of where it launched.
No lookup file was ever provided for 4e. Would you like to create one?
2 - in checking through the forums, I see someone make the 4e XML file for the monster manual. Assuming my first issue is figured out, is the 4e Monster Manual available so I can look up creatures?
Not that I know of, but that doesn't mean a whole lot
3 - When dealing with the Maptool, all the tokens have their information already within the rptok file(AC,HP...etc). When using Init tool, it seems I can only use .png files for the graphics. Is there a way to use the rptok files in initool?
Init Tool tries to read the properties within the rptok file according to the mapping of the game settings file. The 4e file doesn't use the default values in MT as they don't provide enough data. It uses a set defined for one of the 4e macro sets.
3a - better yet, when dealing with the Token tool, can it create the rptok file instead of the .png file?
Token tool only does the graphics files, you have to import them into MT, IT or CT to create the rptok file. You would have to talk to Trevor to determine if TT will ever create an rptok file.
4 - When creating a group, I can't use the lookup option again for creatures or for my PC's. Again, is there something I am missing here?
See answers above.
5 - If I have a number of creatures in an encounter, can I take them and make them into a group? I am thinking that because I can't add multiple encounters together, I could add multiple groups together to make for easier combat situations.
Select them all and then drag and drop from the encounter window to the group window. It should copy everything over.