Arc GRID -> GRASS cell | TIFF

[Conn Copas]

All

I'm having trouble understanding the Arc docs about GRID -> GRASS, using
gridimage. As I see it, the routine won't create directories, only files,
so I have created a LOCATION_NAME/MAPSET/cell, etc structure, adding a
DEFAULT_WIND file for good measure. I am also using LOCATION_NAME as the
output of gridimage. My problem is that Arc claims the output spec "is an
invalid GRASS name". Questions:

1. Do I have to define GISDBASE explicitly to Arc? I have tried (a) giving
an absolute path spec for the output (b) placing the LOCATION_NAME dir in
my workspace dir, ie, a relative path spec (c) defining GISDBASE as an
environment var.

2. Similarly, how do I define the MAPSET where I want the files written?

3. Will Arc automatically reduce the data to 8 bit if necessary, or do I
have to do that first?

4. There is a suggestion that Arc7.1 subscribes to the Grass3 directory  
naming standard. Has that changed significantly?

A second problem concerns GRID -> TIFF. My original GRID has about 500 values,
which I have reduced down to 256 using "slice". When I "describe" the output
image, it has 16 bit rather than 8 bit pixel depth. I can read the output image with some graphics programs but not with others. XV, for example, seems to
think there are only 6 colours there, even when set to 24 bit mode on a SGI.
The Grass relevance is that r.in.tiff doesn't like 16 bit data. Any clues how
to make Arc use a more sensible pixel depth?