This does not surprise me at all. In fact, I was completely expecting it. Most people who could use the $8000 credit have probably already purchased a home, given that the tax credit was supposed to expire. So even though the government will be extending the $8k tax credit, they had to know it would not do much to prop up home prices, since few people would be able to take advantage of it.
I would expect the housing market to really heat up now. At the least, I would expect home prices to stop falling, except for the most expensive homes.
No. The 8k is for first time home buyers. The 6.5k is for existing home owners that are buying a house. If you own a house, and you sell it and buy another house, you get 6.5k. If you have not owned a home for 3 or more years, you get 8k when buying a home.