neogel, the FAQ sticky answers both those questions, as well as probably quite a few others you have. Might be worth a read.
Majria:
I'll answer the talent question last.
Shadowform does have a visual effect, but it's not much. You sort of fade out and have a purply mist surround you. Shadowform is not something you get for the looks.
Whether or not a priest is still a viable healer with a shadow spec depends on the healer, the group, and the dungeon. It depends on the healer mostly in terms of skill but also equipment, particularly your mana pool. You have to be a better player to be able to play a shadow priest in a group because the only talent you have that has any bearing is Improved Fade. The group matters because sometimes groups are very close-minded to a lack of optimization, but also depends on the tank's equipment, and the rest of the group's ability to play as a team. Mages that draw aggro constantly and players that don't assist are going to be a real handful, and while they aren't your fault, you'll often take the blame. (This is true of all healers.)
The place you are grouping matters especially, because prior to level 45, you won't really feel any pinch in an instance with a decent group. Scarlet Monastery, Uldaman, and Zul'Farrak are difficult in their own right, but nowhere near as taxing as Sunken Temple, Blackrock Depths, Scholomance, etc. will be. I used to swear that a shadow priest could heal fine in any situation that a holy priest could...and then I did the Lyceum in BRD. We lived because I stayed on my toes and the rest of my group was good and knew what they were doing, but just barely. I was also above the normal level for that dungeon, but my equipment was sub-par. If I had had holy talents, or discipline, rather than predominately shadow, I'm sure it would have been much easier. The question I ask myself though is, easier enough to make me bored to tears outside an instance?
My overall belief is that as long as you care about healing and this is your pursuit in a group, your talent choices shouldn't matter too much, and you shouldn't penalize your solo play for it. Opinions on the subject tend to be very polarized though, and I often get into heated arguments with holy proponents like Lev on the Blizz priest forum. (I am Restandre there.)
I'm going to give you two renditions here. My character is Shadow/disc. My guildmate has played around with a lot of different configurations and finds a balanced approach to work best for her. Since the only real necessity from the shadow tree is Mind Flay, and the rest mostly just helps you deal more damage, I'm going to give you that build:
Discipline (20):
5 Silent Resolve (or Unbreakable Will)
3 Improved Shield
2 Improved Fortitude
3 Martyrdom + Focused Casting
2 Mental Agility (to get 15 spent in tree)
5 Mental Strength
Shadow (11):
5 Spirit Tap
3 Blackout
2 Improved Pain
1 Mind Flay
Holy (20):
5 Holy Specialization
5 Spiritual Healing
5 Subtlety
5 Improved Healing
My overall build is similar, except that I drop the Holy for more Shadow. Finish Blackout and add Improved Fade, Shadow Reach, Improved PS + Silence, Shadow Weaving + Darkness, and drop one point of Mental Strength for Shadowform.
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