First question is easy. You have it wired up correctly and the parking lights go out when the headlights are on. This is the way that works. In regards to the second question I believe you're right cause I'm having a dimmer switch problem as well wherein my lights only work on the low setting and when you hit the switch for the "high beams" the lights go out. hmm. Wonder if maybe painless just wired it wrong? I believe the last wire's you are referring to are for the air conditioner blower. Don't quote me on that though as I can't get my heater blower working as of yet. Other than that it's a simple install that took me about 3 weekends worth of work. It was a pain in the butt but well worth it in the end.