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To the best of my knowledge, you can only use the nespresso capsules with their machines. It is a bit of a drag, because the coffee works out more expensive and you're also limited to the list of their blends. On the plus side, I find their coffee to be really good, so I don't mind.
Not that I'm aware of, only the nespresso capsules. Melitta used to make a one to four cup brewer that uses a small filter and the coffee of your choice. There may be others out there that still do, but the convenience of the pod or capsule is what has sold the newer machines.
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