So under the new system, do Dukes even have any responsibilities if they are not also a region lord? Region lords, especially, err, city region lords, have a lot of responsibility and duties. It seems to me that all Dukes are good for is taxing his lords and being useless.
Dukes will have as much responsibility as you give them. That does not mean they will get any more game mechanics buttons to click. But they should still be responsible for the welfare of their duchy. If you don't want to hold them to that, then that's your choice. Which pretty much works just like it did in the old system. The only real difference between a "duke" and a "lord" was that the duke had the "Secede" button. Which he still has in the new system.
Who draws the duchy borders?
The lords, by choosing their duchy allegiance, Just like in the old system.
Can region lords still defect to an adjacent duchy?
Yes. Also, a lord can change allegiance to to the same duchy as the region he is physically in, even if that duchy is not physically bordering his region.
Who gets to create new duchies?
The ruler creates new duchies. A ruler can bestow the title of Duke on any lord of a city, townsland, or stronghold who is not already a duke. Their region is removed from their currently duchy, and becomes the first region in their new duchy.
Who gets to name the duchies?
The ruler names the duchy at the time of its creation.
Who cleans up empty/dead duchies?
The ruler can disband any duchy that no longer has regions. He is not required to do so, and can even appoint someone as the duke of a duchy that has no regions. But empty duchies and vacant duke positions will stick around until the ruler decides to disband them.
How are dukes appointed/elected? How much freedom do different government systems have to change this?
At the moment, all dukes are appointed by the ruler. There are no provisions for electing a duke. I don't believe that any such provisions are planned, but I could be wrong on that.
Can each duchy have its own system for selecting its duke?
No. And this is almost certain to never happen. Selection method for dukes would be determined at the realm level, if multiple methods are ever implemented.
Will there be an easy and intuitive way for realms to say "This is all very new and scary. I just want to default to exactly how the old system works until we figure out the implications and controls of the new Trade system, the new Estate system, the region population re-balance, etc., etc., then we'll come back and figure out what to do with the new Duchy system."
When the transition is made, everything in your realm should initially be set up the same. All your government options should carry over. i.e. you will still have the same lords and lord selection methods, the same dukes, the same duchies, knights will be sworn to the same regions with the same percentage oaths, etc.