I've been hoping to get an observation hive at some point. The precision required is above what I'm going to be able to accomplish on a first try, but I'm sure my third observation hive will be amazing. 
I believe that the "bee space" is considered to be 1cm (close enough to 3/8" to make no difference). That means you'd want 1cm on each side of the frames. However, apparently Michael Bush has found from experience that brood can't always emerge with this spacing. His suggestion of 1 3/4" sounds like a great place to start to me!
As to the space around the frames, I'd stick to the bee space of 1cm.
Using a metal frame does seem like a good idea. You could also try for hinges and a latch, or even bolts with wingnuts.
You can keep the hive inside and run PVC pipe from the entrance to the outside, but you'll probably want some sort of double gate so you can shut the bees in the hive and keep more bees from getting in through the pipe when you take it outside for manipulation. Overall, outside is probably easiest, and you should be able to cover it with wooden boards or some dark plastic without too much trouble.
I'd definitely use only one opening. You'll want to make sure they don't overheat, so be careful about dark covering in direct sunlight, but as long as the hive doesn't experience direct sunlight, the bees shouldn't have too much trouble regulating temperature.
I'm not sure what to suggest regarding feeding. With such a small hive, it's probably easiest to simply give them a partial (or full) frame of honey when they need feeding. If you don't have one handy, you could simply pour honey or thick sugar syrup into an empty drawn frame for feeding. Ultimately, they'll have so little room, I suspect you'll need to remove honey more often than you feed them.
I think it's best to consider the observation hive as expendable. You have a decent shot at keeping it alive for a few months, but it's probably not going to last a cold winter and you'll get best results if you rotate in interesting frames from other hives.
I believe that the "bee space" is considered to be 1cm (close enough to 3/8" to make no difference). That means you'd want 1cm on each side of the frames. However, apparently Michael Bush has found from experience that brood can't always emerge with this spacing. His suggestion of 1 3/4" sounds like a great place to start to me!
As to the space around the frames, I'd stick to the bee space of 1cm.
Using a metal frame does seem like a good idea. You could also try for hinges and a latch, or even bolts with wingnuts.
You can keep the hive inside and run PVC pipe from the entrance to the outside, but you'll probably want some sort of double gate so you can shut the bees in the hive and keep more bees from getting in through the pipe when you take it outside for manipulation. Overall, outside is probably easiest, and you should be able to cover it with wooden boards or some dark plastic without too much trouble.
I'd definitely use only one opening. You'll want to make sure they don't overheat, so be careful about dark covering in direct sunlight, but as long as the hive doesn't experience direct sunlight, the bees shouldn't have too much trouble regulating temperature.
I'm not sure what to suggest regarding feeding. With such a small hive, it's probably easiest to simply give them a partial (or full) frame of honey when they need feeding. If you don't have one handy, you could simply pour honey or thick sugar syrup into an empty drawn frame for feeding. Ultimately, they'll have so little room, I suspect you'll need to remove honey more often than you feed them.
I think it's best to consider the observation hive as expendable. You have a decent shot at keeping it alive for a few months, but it's probably not going to last a cold winter and you'll get best results if you rotate in interesting frames from other hives.
