(1) "Usability" is in the mind of the user.
Yes and no. All users have a mental model of how a system should work. When a design deviates from this model drastically, it creates usability issues. Designs should be intuitive, and should require little explanation (no one ever reads manuals or help files).
As a UI professional the general rule of thumb I use is if the user doesn't figure it out by his or her second "guess", your design is bad and needs to be redone. Good designs are the ones where the user doesn't really notice the UI (or its relative complexity) at all. Basically in most cases if a user can't "grok" what to do by just looking at it, you have a problem.
There's also no substitute for conducting usability tests. The results from these tests can't really be argued with, if there's a problem or stumbling block, it needs to be addressed. You'd be surprised how dumb little things like a misplaced button will cause a 2 minute task to average well over 15 minutes.
(2) "Designers" who can't code have absolutely no business "working" in software.
Nope. Like everyone else on this thread, I'm calling bullshit on this. In my particular case, I actually am a developer and can code the layouts I design, but that hasn't been my focus (or job) for quite a while now.
While it definitely helps to have a background in development (or at least a good understanding of what can and can't be done easily on the backend), I wouldn't say it's critical. My assumption with regards to open source projects is that most design suggestions are often summarily shot down or ridiculed, partly because developers rarely understand the reasons why things should be done a certain way (most common response is "that's stupid"), and because the nature of post-UI design often slights the developer who created it by having to change what they implemented.
The easy usability gains are having a consistent UI (having well defined design and behavior), and sticking to existing standards (unless there is a really good case or gain to be had by ignoring it). Products immediately become inherently more usable if they are consistent in how they present information.