Almost 2 years ago, I converted BE 1.4.5 from a website project to a WAP project. I documented the steps I did in the Feb 14th post in
The process may be different with BE 2.0 RC and with VS 2010.
Although there's definitely reasons to convert to WAP, just Fyi, the vast majority of BE users are using it in its default Website model.
Other than those steps I documented back in that
old thread, I haven't done anything with this recently ... so unfortunately do not have anything more current to provide you.
You also had a question about uploading new Extensions. If you use the Website model, then you can just upload the .CS extension file to the webserver, and no recompiling is necessary. If you're using the WAP model, then you would need to recompile.
This is one of the nice benefits of the Website model ... you can just copy files to the server without recompiling. ASP.NET does all the compiling for you ... dynamically.