In the request handler source file, one line reads [request_handler("Default")]. What is this line for?
The request_handler attribute is the name of the handler placed in the handler tag in the server response file. This associates any replacement tags with your DLL. You can create a different request handler (which requires a different class) and use the subhandler SRF tag if you wish to use more than one handler.
Is it possible to return something other than True or False from a replacement handler function?
The only values you can return, other than HTTP_SUCCESS and HTTP_S_FALSE, are error codes. These should only be used when a catastrophic error happens, because returning an error code will not render any the SRF but will instead render an error page.
Can I pass parameters to replacement functions from a server response file?
Yes, that is possible. However, you will receive the parameters in a single block of memory. It is then up to you to parse that memory block to receive the parameters.