Simply sign them up on the web page of their sponsor. Reports will be generated the same as any internet member. The DB always generates a unique ID for each member of your downline. If your company provides a different one, you can add this in another field in the database. My company places members in my matrix for me.
Members can access their reports whenever they wish by following a link.
Password protection and e-mailing of the reports is available. Customers can be verified before accessing the reports. Another option is to not display the report via the web, but to email it to the member's email address. Yes the number of upline levels and downline levels are customizable as well as the layout of the report. Yes, all matrices that are generated by the DB, will be forced.