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2. Even if you didn't do this, you don't need the 2Wire for DNS. Your own router will handle DNS, acting as a DNS resolver. It will use AT&T's upstream DNS servers as the upstream resolvers, the 2Wire is not involved when in DMZPlus mode.
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That's exactly what I thought should happen as well. But when I check the status on my linksys router I can see that it has not picked up the DNS servers for AT&T. It instead thinks that it should be using the 2wire IP for dns resolution:
******My config************
WAN IP
99.39.212.X
LAN IP
192.168.1.1
Connection Type
Automatic Configuration - DHCP
Connection Uptime
0:02:33
Gateway
99.39.212.1
DNS 1
192.168.1.5
DNS2
192.168.1.254
**********************
DNS1 is my own local caching server and I used to have it set to use 192.168.1.254 as my forwarder. That setup worked great, and I'd really like to just continue using it if possible. I manually added this IP to the local DNS settings on the router.
DNS2: This is the IP address that the linksys got from the 2wire when I set up the dmz forward. And the problem with this is that I cannot ping or access the IP address for the 2wire anymore. No ping = no dns resolution. 
From reading that link you just posted though I should be able to clear this up if I change the IP range for my own LAN? Once I do that my understanding is that I should be able to ping the 2wire again correct? And I am guessing that once I can ping it, the DNS resolution will take care of itself.
Thanks!