Well now isn't this timely. I was just working on my battens. At best I don't think they change the sail shape that much, that's the job of the sailmaker, but you can make sure they don't fight the sail.
1. is it considered 'class legal' to taper them, and do most racers do it?
Yes is is class legal and no most racers don't do it. They used to back in the early days, there's a section in "Welcome to A Fleet" on tapering battens. This forum was polled last year and apparently nobody does it anymore.
2. If so, is it class legal to use other materials or non hobie battens in racing? No. You have to use Hobie supplied parts. There are some quibbles: the Tiger or Wildcat when it's an F18, a Wave under IWCA rules, and the Hobie 21.
3. what experiences can be shared about what batten tension to use for moderate wind (say 12-18 knots)?
Well there's tension and tension. There's the amount of compression needed to knock them out of column. Stock battens are usually around 6 pounds for the bottom batten and close to 25 for the top batten. If I'm tapering battens I like to try and make them all about the same at about 6 pounds or less. Unless you have a flat top sail when that top batten wants to be 12 or 14 pounds.
When you're tying them in to go sailing it's usually recommended that you just barely snug the lines up when it's light and set them as hard as you can pull when it's 25 knots or so. Some boats use heavier (more tension) battens in the top for stronger winds.
The Hobie Tiger main (flat top) has stock batten tensions of 14, 11, 6.6, 4.4, 3, 3, 3 pounds.