I'm not sure why your first question didn't show up until after I answered the second one!
As far as the price goes, it depends. I've seen some houses prices so ridiculously low that HUD gets MANY offers and sells the property for way over asking price. Then there are some homes that sit on the market and HUD refuses lower offers. You need to look at how it's priced based on the market. It should be priced for the condition it is in.
Just be sure you find someone to help you who has experience with this type of sale and can help you manuever your way to the best deal for you.