Spdracer, you are putting a 97 5.0L into a 92 truck and using the 97 dash and door panels as well? (just to clarify)
Also I hope you took notes! LOL
To answer your questions:
the charcoal canister basically stores some fumes from the gas tank until the canister purge valve opens, then the fumes are sucked into the intake so the gas vapors can be burned.
I simply removed the charcoal canister from this equation, meaning when my canister vent and purgeo solenoids (Gen II's have both in series, one near fuel tank, ine near throttle body) it simply vents from the top of my gas tank directly, no chacoal canister.
Completely legal here in CO, not sure about where you live
IN CA its likely I would have to add a Charcoal canister of sorts to pass emissions, phooey on them!
Installing a Gen II HVAC box is NOT SIMPLE
Some people have swapped out the ENTIRE FIREWALL in order to accomplish this.
I personally think you are complicating things by trying to retain all the Gen II dash functions, wiring, dash, door panels, etc
it is much easier to install the 5.0L drivetrain as a stand alone unit into your 92 truck IMO
Going this route you only have about 16 wires total that talk to the truck, and thats including cruise control, push button 4x4 (if you wanted it), etc
Email me for wiring info, although without having both harness torn apart in front of you the info I have may take a while to understand
I vote keep your Gen I HVAC controls, notch the AC box to clear the valve cover and exhaust, thats just me though, the conversion has been done both ways