The first model of the Discovery, the 200 Series body, is nothing like a Discovery 2. The Discovery 2 only looks similar and that's about it. Even the 300 Series, regardless of the interior looking very much like the D2, is still nothing like the D2 underneath. So be sure it's what you want!
The Rover 3.5 is the smallest version available. At the time in the Range Rover it was in 3.9 litre form and appeared in 3.9 form for the 300 Series body of the Discovery.
The fuel tank will be 85 litres. Anything from 14-18mpg should be expected with sensible driving, maybe more while cruising.