There's a link at the bottom of this post to an online version of the rules of Snooker. These are the rules I'm working off of to answer your questions. If you're watching this, I'm guessing you understand the rules of snooker, but I'll explain some of the basics in detail for others reading this. Most terms in quotes can be found in the rules link.
- At 1:40 the referee is attempting to see if the cue ball is "snookered". (Snookered means that the cue ball does not have a straight shot at any part of any "ball on" - the ball(s) the shooter can legally hit.) If the cue ball is snookered, then the incoming shooter has a "Free Ball" which basically means he can nominate any ball to aim for (not just a red ball, which is what he would normally have to target as the incoming shooter). The referee is using an already potted red ball as a visual aid to see if the shooter has a line on either of the two reds down at the bottom (that's why the added red ball is then removed after - it's just there for visuals). Because it's not a free ball (and a foul was committed b/c Ronnie didn't hit any balls), Higgins chooses to have Ronnie retake the shot.
- At 5:24, Ronnie's cue touched one of the red balls on the table, which is a foul. The cue can only touch the cue ball. Whether he did it intentionally or made a mistake is hard to say, though the announcers at first seem to think he just lost concentration for a second. Later it seems he may have done it on purpose, because of your third question.
- This appears to be a tricky one, but here's how I interpret it. If the referee believes that the shooter is not "to the best of his ability [endeavoring] to hit the ball on", then he calls a "miss". The incoming player may play the balls as they lie, or request they be reset and the offending shooter shoot again. However, if the shooter commits a penalty before nominating a color (which Ronnie did at 5:24), it is a "foul" and not a "miss" (also incurs 7 point penalty). So since Ronnie didn't call a ball, it's a foul. In this case, if Higgins wants him to reshoot, the red ball would NOT be replaced back where it was. The announcers say this at about 7:00 in, but also seem to say that the referee could call a miss in a situation like that. So since the referee has determined that it's a "foul" and not a "miss", the balls would not be replaced if Higgins wanted Ronnie to reshoot. I'm guessing that Higgins chooses to shoot because the moved balls would have given Ronnie a shot on the black ball. Now, the cue ball was also touching the red ball (See "Touching Ball"), which means that the incoming shooter can nominate another ball and shoot it and incur no penalty, even if that ball wouldn't normally be on. Higgins didn't have a good shot at potting any red balls, so that's why Higgins chooses to shoot for the blue ball instead. I'm assuming Ronnie hadn't shot for the blue before because he didn't want to give Higgins an open shot at the reds.
That's my best guess.
http://www.billiardworld.com/snooker.html
