A site built over 10 years ago was done in a less than preferred way. But, they didn't know any better.
The root domain is 302'd to a link like this:
http://www.domain.com/mainfolder/default.asp
Then links to products and such are like this:
http://www.domain.com/mainfolder/search.asp?sku=123&dept=xyz
My questions,
1. Should the 302 redirect be a 301 (I'm thinking that's a big YES)
2. Could a URL structure like this hurt affect search rankings negatively.
3. Could a URL structure like this hurt overall homepage authority (thereby hurting interior pages)?
Thanks in advance.