...yes indesign can convert values automatically so long as you use a measurement value like "mm" at the end of the value, it will convert it to the preferences they are set to, in your case inches...
...nothing wrong with using Acrobat version higher than Acrobat 4 unless your dealing with a print provider that is reluctant to take on PDF files that utilize live transparency due to equipment limitations they might have and they are unwilling to take on the responsibility of flattening issues if they arise (they can, for example, flatten PDF files in Acrobat Pro or they might even place a PDF in indesign and export the PDF to 1.3)...
...another reason for using a lower version of Acrobat is that many people don't have the latest version of Acrobat Reader, so for email proofing purposes it is also worthwhile using either Acrobat 4 or up to Acrobat 6...
...if the print provider does flattening then you can get into a situation of "who's to blame?" if problems arise further down the road, so if it were me, i would prefer to have control over my artwork and flatten in myself, check it over and once happy send away...
...i personally wouldn't flatten however if I use a print provider i know has the latest Adobe PDF print engine on their system...
...your artwork is without the use of transparency i imagine, so the version of pdf won't matter in your case...
...you can tell if an indesign page has transparency because you will see a checkerboard symbol bottom right of the page, like this next to the page number:
...the safest option is to supply in Acrobat 4 (1.3), however if your artwork has transparent elements then the flattening has to be set to HIGH and the onus is on you, the artworker, to spot any flattening issues that might occur...
...in indesign you have a transparency flattener preview palette you can use to identify possible problems, this is under window > output > flattener preview. Changing the "Highlight" option to "Raster fill text and strokes" is the one to use mainly, and also ensuring the preset option is set to "High"...
...it is then a case of manually checking each page that has transparency using the pages palette, any areas that become red highlight will become raster (bitmap) which for body copy or small text, can be a problem and won't print as sharp as neighboring text (or strokes/lines) that don't interact with transparency...
...a page that views completely grey is good to go, however there are situations where you can't fix problem areas and will have to make do...
...this function is mainly to inspect fairly complex artwork before flattening takes place on output. The solution is to simply move text or vector objects above transparent objects/areas wherever possible (command "bring to front" or move to a layer above using the layers palette)...
...you can also view individual separations using the window > output > separations preview palette, this is useful for checking spot colors (special ink mixes) are as required...
Andrew