Q1: Having never used SDK what is it? I tried to install it off my DVD and it does not appear to do anything other that load some files somewhere from the cmd routine?
The Weapons SDK is just a PDF file the explains how to add it into third party products (looks like they mean scenery, but not sure). Interesting info in there, but even I need to re-read it to understand it better.
If you read the Copywrite Policy it might give you some idea of what you can do.

Q2: How do I change the armament configuration for individual aircraft, eg Bombs for the CS B52?
Just open the loader bu clicking on START > ALL PROGRAMS > CAPTAIN SIM > WEAPONS FOR FSX > LOADER. Once that is open, select the CS B-52 and click on the INSTALL button. It's that easy. There are no bombs for the Weapons for FSX at the moment. Depending on how well it sells, will determine how much further Captain Sim will develop it. ATM it is like the B-52 Exterior was released, with promises for taking it further (the VC).

Mark