I hope I'm not letting the cat out of the bag here but I know somebody that has over 300 proxy sites that is making money hand over fist using the same script, different templates he buys here in the B/S/T folder and $1.99 .info domains from GoDaddy... and yes, proxy sites do pay for themselves, especially if you have a network of them that all link to each other. Not to mention, they are so easy to market for free on MySpace or Facebook and they require virtually no maintainence.
Yes you can make it easily.... Just go outside and sing a song.... Some times you will get more than $1
I would create a blog and place adnse on the blog. Build backlinks to it and you can easily build $1 per day. As for your goal of building 1000 sites at $1 a day, this is very unrealistic unless you have many people who can help you create these sites or have an autgeneration content tool (which are very poor). I'd stick with the one site first
I would go several high quality sites instead of a 1000 spammy ones. Google will detect them eventually
Your knowledge is in the right track man. Frankly speaking, I like this kind of question. Ready for the worst but actually hope for the best. Good luck for you and for us.