Milestone has full recommendations for camera compatibility with XProtect LPR in their admin guide. I pulled out the relevant section here.
To answer specific questions, let me start with question 5 first, because it impacts everything else.
5. XProtect LPR can use H.264/H.265 cameras, but it will analyze on keyframes only, which generally means 1 FPS. In our tests, using H.264 resulted in high latency, on the order of 10+ seconds.
Using MJPEG, we saw little difference in processing delay at various resolutions. 720p, 1080p, and 5MP all resulted in similar latency and CPU load.
1. In a camera properly set up for license plate recognition, day and night operation are much more similar than in typical cameras, since it should be monochrome 24/7 with integrated IR for best results.
2. I'm not sure how specifically high and low temperatures would affect capture. Weather conditions like fog, snow, or rain, could reduce accuracy, especially when using strong infrared illumination.
3. Pole height for LPR is tricky, because angle of incidence should be as shallow as possible for best recognition. Milestone recommends 15-30 degrees, for example. So getting that angle while keeping the camera out of reach may require the camera to be mounted further from the capture area, with a longer lens than is usual.
4. External IR used to be most commonly used for LPR, but integrated IR may work, depending on distance. We have multiple tests using standard integrated IR cameras (see License Plate Capture Shootout 2014 and Low Cost License Plate Capture Shootout), as well as dedicated capture cameras with higher powered IR (see Testing Messoa 3MP LPC Camera and Testing Geovision MP License Plate Camera).
Specialized LPR cameras like the Messoa we tested, linked above, with built in IR are often able to capture out to ~100'. But if using standard cameras, you may need external IR for longer ranges.
I hope that answers some questions. Let me know if there's anything else I can clear up.