1. How long should i move my fingers before doing a reality check?
It will vary for everyone, but around 20 seconds. Don't count though!
2. When I wake up in the middle of REM sleep, would it still work if i moved at all?
No. If you move, you can WILD instead.
3. Is there any Sleep Paralysis or Hypnogogic Imagery involved with this technique?
Possibly, although most don't. They just report RCing after a while, and being lucid.
4. I heard the FILD technique is less effective during morning hours. Is this true?
It depends what hours you mean! It's more effective in the early morning hours (1am - 5am) but any later you may be too awake, and there may be too much light / sound etc