"In general, you can can show that if $P_n$ is the nth degree Taylor polynomial of f at c, then the derivatives of $P_n$ at c agree with the derivatives of f at c up to and including those of order n."
Which is what you mean, I believe.
I agree then that the osculating circle would share the same curvature as the second degree Taylor polynomial at that point.
"Without loss of generality, we can apply an affine transformation (translation and rotation of the plane) to move the point on the curve to the origin so that the tangent vector there is on the positive x-axis; this greatly simplifies the upcoming algebra."
"The tangent line, i.e. the x-axis itself, interpreted as the graph of a (constant) function, already shares the same first derivative as the curve at the origin."
Or move it such at the x-axis becomes the tangent at the origin.
"We need to find a circular arc (we only consider the arc of a whole circle so that technically we are talking about a function, at least near the origin) that shares the same second derivative as the curve."
We need a function that approximates the curve of an osculating circle local to that point.
"Without loss of generality, suppose the curve, interpreted locally as a graph of y=f(x) near (0,0), has a positive second derivative f′′(0)>0. Now place a circle on the plane of radius R tangent to the x-axis at the origin whose center is above the x-axis. The center must be at (0,R). "
we have two things: the curve itself, and a circular arc, both situated nicely at the origin. from there, we're going to describe the circular arc by a function, and then conclude things from there using math
if the circle were centered at the origin, it would be defined by $x^2+y^2=R^2$, yielding $y=\sqrt{R^2-x^2}$ for the upper half and $y=-\sqrt{R^2-x^2}$ for the lower half. since our circle touches the origin on its circumference, its center is $R$ units up, and so the lower half's graph is $y=R-\sqrt{R^2-x^2}$
My book skips over introducing unit tangent vectors in any rational way. I need a bit more explanation. I'm not sure what you mean. =/
Wikipedia isn't much help (since they skip over the properties of $r'(t)$ and go straight to the unit tangent vector. en.wikipedia.org/wiki/Tangent_vector
I'm guessing because the unit tangent vector is much more desirable than plain $r'(t)$.