1. Satanism is called "Satanism" because we live in a mainly Christian society, and Satanism is based on the so-called darker side of human nature according to Christian beliefs (i.e., Satanists believe that we should indulge in the "seven deadly sins" because they lead to physical and mental satisfaction [although we're not supposed to go around hurting other people], but according to Christian belief, indulging in any type of sin, whether it hurts anyone else or not, is a big no-no). And of course in a Christian society, Satan is one of the names that represent the "dark side". That's why Anton LeVay, the founder of the Church of Satan, chose the name for his religion.
2. The reason it's mostly known for worshipping Satan is, 1) because of the name people who have never actually tried to learn the truth behind the religion just automatically assume it must have something to do with the Christian devil; and 2) there are some actual devil worshipers that also refer to themselves with the term "Satanist".
3. Satanists who follow Anton LeVay's teachings do not believe in either God or Satan, nor any deity whatsoever. But as I said above, there are some people who worship a being known as Satan that also use the same term to describe their religion. In reality, the name may be the same, but the the beliefs are totally different.
4. Yes, Satanism is a very misunderstood religion primarily because of the name. Since most people automatically assume Satanists worship the devil, they tend to be afraid of them and they don't see that there's any reason why they should look into the religion further and see what it really is about. And some hardcore Christians seem to believe that any religion that's not their own is only the devil influencing people and turning them away from God. But the main reason people fear Satanists is that people fear what they don't understand, that's just human nature.
5. No, Satanism isn't linked to Christianity, other than borrowing the name from the Christian devil. Satanists are atheists (the LeVayen Satanists of course), and they have a completely different way of viewing the world and themselves than Christians do. We believe we are the makers of our own fate, and it is in that way that you can say we view ourselves as our own "God". Because life is what we make it, not was some cosmic being determines for us.
The Satanic Bible by Anton LeVay, and I am a Satanist myself.