The full product manual is available as a PDF file on the lexicon website - looking at that may answer many or all of your questions.
The MC-12 does have analog pass-through, so I would guess it would make your KRC preamp redundant. It has video switching for both S-Video adn component video so, yes, you can feed your video feeds through the MC-12. If you use more than one "type" of video connection, you will probably need all types connected from processor to TV as well (ie, I doubt it will convert from one type to another).
I don't personally have hands-on experience with an MC-12 yet, but own an MC-1 and plan to utilize Lexicon's upgrade program to get an MC-12 this month. -Kirk