"First off, apologies, I come from a Maya background, and as such I find myself looking for similar working methods within XSI, so just bear with me whilst I make the transgression! 
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My recommendation is to forget NURBS as far as you can, and learn subdivision surfaces. They work much better in XSI (whereas Maya is superior with NURBS).
"1. What is the equivalent in XSI for setting an objects smoothness, i.e. press 1,2 and 3 in Maya results in better display resolution, i think coarse, medium and high is the soft equivalents? Also, on a related note, how do I control tesselation at render time, where are my options to whack it up or down where needed?"
When you have the object selected, click on the Selection button on the right panel, and click on the icon for Geometry Approximation. It should ask you whether you want to edit the property for all objects, or make a local copy. Pick whicever you want. There you can set U and V accuracy for hardware display and rendering separately.
"2. How do I add 'into' a nurbs surface within XSI, what I mean is how do I add ISOPARMS to a nurbs surface I have created, where say, the resolution is too low for what I require. An example, say I create a nurbs cylinder, which is quite long, I then decided half way down I want it to bend outover slightly, so basically, how can I add isoparms to that area. I can't seem to find any mention of this in the manuals?"
It's been ages since I last used NURBS for anything, but it went something like when you have the object selected, choose Add line or Add knot or similar from the Edit > Surface menu on the left panel (you have to press 1 to get the Modeling panel visible). Then you get a popoup window where you choose the place for the new isoparm. Once you have it in place I heartily suggest freezing the object.