[theprgramerdude]

The short answer:

1a. Not really. There's nothing to average if you don't oversample (if you read it multiple times in your code and average it without setting oversampling on, that's still oversampling).
1b. It is possible to oversample without averaging. You just add up all the samples and, dont divide for the average. It may or may not be useful, though.
2. Yes.
3. If there were electrical noise the the line from the sensor to the ADC in the cRio module, one reading by be off by quite a bit. Oversampling and averaging could remove this electrical noise in the readings if its of a special type. If the noise was present and significant in the sensing done by the sonar sensor and it throws its calculations off, then oversampling is rather useless, as it will just average out to the correctly-obtained-but-realistically-incorrect value.