I've got a few quick questions:
1) Is it possible to make your games into a standalone EXE file (like... so I can put it up for download and someone can just run it without Crystal blend?)
Yes. Easiest is to just include the dll's from CS with your app. Static linking is also possible.
2) How hard/easy is it to make a game in crystal blend. I was thinking of a 3rd person sword fighting game (pretty basic, simular to Dark Forces II lightsaber combat, 2 different swings pretty much)
Making a game is always some work. With Crystal Space you at least don't have to worry about 3D rendering. If you also use CEL in addition to CS it becomes even easier as some of the game logic can be handled by CEL.
3) Is it possible to have a bunch of levels with AI? What about cutscenes? Do they have to be prerendered or can I just trigger animations to play in-game?
CS doesn't handle AI. That's up to you to implement. Cutscenes can be done with the engine or with movies. Up to you. But the engine can be controlled to do predefined animations.
Im an old JK2 and JKA mapper. They were Q3 based games, and I am learning blender. I am hoping to grab crystal blend and start a real game from scratch (almost... anyways)