it's good practice to put a small capacitor between the switch and the ground to avoid the 'pop' sound when you hit the switch.
when i did this in '04, i used a resistor instead of the capacitor, which seemed to work the same.
that way when you're switched 'off', then the amp still sees a resistance rather than a short. i don't think it will cause any issues with the short, but you're more likely to get the 'pop'.
here's my thread:
http://www.talkbass.com/forum/showthread.php?t=113555&highlight=kill+switch
No!
A capacitor is only going to make the pop worse. Use a resistor.