You can substitute this stuff for sugar. There is a bit of a difference in alcohol produced but not enough to worry about too much. A lot of homebrew "experts" scoff at the use of malt extract. We've been using it for over 30 years and we see it in commercial micro breweries so we know it's well liked by everyone else!
The spray dried has a different flavour to the liquid. It's lighter and more malty. A mix of liquid and dried is probably best but it's hard to pack the dried malt in a kit so you have to add it yourself!
The liquid is the best all purpose malt if you're making up recipes. As a rough guide you need about 1.5 to 1.8kg for a basic beer and up to 3kg for a full bodied one.
You need about 3kg in total malt and sugars for a 4.5% beer. That's usually enough!