1. Yes, you need git installed. You can install any version. I've used TFS Git, but installed from the open source git repo[/url].
2. Any path will work. This just needs to be a place that your system accesses. Note, this should not be a shared folder with other developers. Your commits should be your commits. That's the idea of git. Each developer has their own repo and commits, then pushes to a remote. Everyone pulls from a remote.
If you are trying to work from multiple machines, just git init a folder from each one. No reason to have a shared folder.
3. Yes, each repo is for a database. I typically use a subfolder, because I may create some test scripts, inits, data scripts, etc that I want to put in the VCS. So I'd have:
c:\git\db1 - git init here.
c:\git\db1\DDL - link SQL Source Control here.
If you have more questions, ask.