MySQL MVCC (InnoDB)

The question is about the behavior of simultaneous SELECT and UPDATE in MySQL InnoDB table:

We have a relatively large table which we periodically scan reading several fields including a field named, say, LastUpdate. During the scan we update previously scanned rows. Updates are batched and performed in a background thread - using a different connection. It is important to note that we update rows that have already been read.

Three questions:

1. Will InnoDB will save previous versions of the updated rows since the SELECT is still in progress?
2. Would using READ-UNCOMMITTED for the SELECT help?
3. How can I confirm that InnoDB saves or does not save previous versions of the modified rows in its redo-log.