@troy,

Parent                               Child
var1 = 1;                            var1 =1;   (reason var1 is intialized before fork())

var2 = fork();                                      (creates child process)

if (var2<=0)                                         (checks if child process is created or not(<0)/ Also check if this fork is being called from child (0))
{
    var1 =33;                       var1=33;                 (if child is not created or this is new child)
}
else
{
   var1 =22;                                          (child is created successfull, assigns var1 =22 to parent only)
}

printf("var1=%d\n", var1)                (the parent should print 22 and child should print 33)

wait(&temp);  //i think this is so that you can read the output


I might be wrong, try running the code and see if that is the o/p.

For your second question: see
http://www.csl.mtu.edu/cs4411/www/NOTES/process/fork/create.html



Updated  in red: