Oops, let me see if I can help:
Basically there are two types of progress in Dead Island; character and story. Character progress is persistent, so if you take your character into another game all the experience and loot you get will be saved to your character. When you join someone else's game, your story progress will only advance if they are at precisely the same point in the main story as you. So if you are in Act 2 and you join a game which is still in Act 1, you will get to keep the experience and rewards for the quests you do with your buddies, but your story progress will not advance. The same principle applies if you join a game which has progressed the story further than yours.
If you join a game which is less progressed than yours, once you reach the point in the main story that your game has reached the game will notify you that it's going to be tracking main quest progress for the rest of that co-op session. If you want to ensure that you're always in control of the main story progress when playing with randoms, just let other people join your game but don't join theirs.
Unfortunately I can't help with these. There is a little mod for the PC version which allows you to fix the crappy limited FOV which is the most likely cause of your motion-sickness, but unfortunately you're stuck with it on 360.
Cool, thanks a lot!
Questions about coop and progress have been mainly addressed, but I have one more little doubt. Say someone joins my game (so theoretically the story will progress), but instead of doing the quest I'm doing at the moment, they decided to go for sidequests or, well, just a different mission. Will the progress of _my_ game be affected by this?
To put it in other words, can two different players do two different missions at the same time, so that both mission count towards game progression?