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Can I use my existing IRA or does that create problems with the money already in there?

No problem, mon. But your IRA custodian may want you to keep the 401k money in a separate account because that money is eligible for transfer into a future employer's 401k. If you are going to complete the transfer into the Roth, it's moot and the existing IRA and 401k monies can be co-mingled.

What will be the tax implications of transfering the 12k from older 401k into a Roth IRA? ie. approx how much will I need to pay?

$12K x your marginal tax rates (federal and state)
The amount taxed is the amount converted from the conduit IRA to the Roth, not the amount transferred from the 401K to the conduit IRA.

What happens if I convert it to a Roth and our AGI goes over $100k in 2000? (from what I understood, the AGI to open a Roth was under $100k?)

The AGI limitation of $100K is on CONVERSIONS to a Roth. CONTRIBUTIONS ($2K per spouse) can be made up to AGI of $150K (phased out at $160K). If you've rolled your 401k into a conduit IRA and then into a Roth and later find your AGI to be >$100K, simply recharacterize (put back) the conversion amount ($12K) into the conduit (regular) IRA; any contributed amounts in the Roth can stay.
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