I'm not the definitive resource, but since no-one else has answered in the last 7 hours...

For one, I am worried about installing it and having it bind to my hijack menu.

If this is the only app you are going to run in hijack, there's no problem.

Does anyone know if adding empacman will cause problems?

Yes. It will not cause problems.

Is there a faq anywhere with suggestions of where to store it on your empeg drives and a step by step install process?

To the best of my knowledge, no. There are a couple of threads detailing exact install procedures buried somewhere in the programming forum, but I'm being too lazy to look them up at the moment.

I would be curious where to put it so that it isn't effected by upgrades and the like.

There is nowhere that you can put it to be completely safe from upgrades. Or, at least, that used to be true, because starting up extra applications used to require little start up scripts and a pre-init application that would get clobbered when upgrading the player software. Upgrading hijack did not have the same problem. The actual application and data files were never deleted, but if memory serves, you'd have to fiddle to get drives to remount after an upgrade, as well. With the ;@EXEC_ONCE, some of the pain of upgrading has been eliminated -- there's no need for the preinit scripts.

I am also considering adding the ;@EXEC_ONCE /drive0/var/empacman/empacman string into my ini file but then I saw someone say that doing that can use up your players resources. Is that true??

Yes. But that's true no matter what method you use to use -- preinit scripts, ;@EXEC_ONCE, or launcher. The resources that empacman takes up are negligible, though. At most, it might make your drive spin up to queue more music a little more often. (So I guess if you meant "use up all the players' resources," then the answer is no).

Hope that helps a bit...