Yes, they understand =)

Of course! In fact, in some places in Spain (Islas Canarias) they also use the form 'ustedes'. In the rest of Spain it doesn't sound bad, we take for granted either that you are/have learnt South-american Spanish or that you are being very polite :)

Hi! In Argentina we use 'Ustedes', and in Spain they understand us perfectly, lol :o) Vosotros is literaly 'you', in plurarl. Simple! REF.: I'm a Certified Spanish Teacher.

You'd be surprised how easy it is to get around using vosotros if you don't want to learn it Anthony, even in Spain. It's actually something that is used in every day life so infrequently compared to all the other forms, that it was too hard for me to really learn even while living in Spain. If you use Uds. and speak with a little of a different accent, but it is a good one, and not American, then they will think you are from another Spanish speaking country, which is actually pretty cool. ;)

Yes,but it will be really weird for the people so if you come to South America use "Ustedes". Well I don't know if in all South America but for the greatest part yes.