Power saving options for Arduino/ATMega328

Let me start by answering the obvious questions, I have review the datasheet and Nicks website in addition to two printed articles I have been holding on to for this occasion.

My goal is of course to minimize the power usage of the Arduino from its battery pack.

To keep the conversation organized, I have reduced my questions in to three categories.

First up: Sleep Modes

(A) There are 6 sleep modes and each have a series of corresponding wake-up sources. I would like to understand how each sleep mode effects the operation of Timer 0 (for millis() calls) and Timer 1.

(B) When an interrupt wakes the processor, how much delay time is there between the action and when the interrupt is processed?

(C) I expect events every 100mSec (stopwatch function of the unit updates on timer 1 every 100mSec) or a pin change to occur every 750mS. I human speak it does not sound like a lot. From the Arduino's perspective, it may seem like eons, so I ask the question, is sleeping in between events worth the effort?