I had the same -meh- reaction that the OP had. Too much cat-mouse-cat-mouse-cat-mouse etc. and way too much cell phone.
I can still take a few of questions though.
Why/how/who was Walhberg working for at the end of the movie that made him kill damon?
It seemed like wet stuff to me. Wahlberg sensed that Damon was some how tied-in to the bad guys and might take over himself or that he would be discovered later on and make things look bad for the Boston PD. Easy solution? Waste him.
What was the point of Jack Nicholson being an FBI informant?
Just another of WAAAAY too many red herrings. Others that appeared: Damon having an affair with the shrink (already noted), the sale of the electronic widgits to the Japanese mafia (was this an indication of something even more sinister about to happen?), the other cop on the inside (the dude who played Bogs in Shawshank), the suspicious looks to Damon at various times by Sheen, Whalberg, Baldwin, and so on. Too many ends that remained untied for my tastes.
Why was Wahlberg such an ass to LEo and why did Sheen let it happen?
Easy. Wahlberg was quite obviously channeling the “bad cop” to Sheen’s “good copy”. This one was so patently obvious, I kept waiting for DiCaprio to call him on it. And though perhaps over-the-top, I liked Wahlberg’s character the best.
Why didn’t Sheen try to escape the baddies that killed him?
He probably figured that as the Chief of Police, back-up was on the way or that the bad guys would remember that you can’t shoot a cop (just like it worked for the guy in Scarface).
And now for an obvious inconsistency on my part. Can anyone explain how / why the other cop working the inside “knew” that DiCaprio was also working both ends when all he did was give the wrong address to the meeting point?
He told him the number was 714, the actual building was 744 which wouldn’t be more than a half of a block away in my estimation. Despite the minor goof which could have been explained any number of ways, if DiCaprio saw a fallen body in the street and it wouldn’t take much to deduce that this was the meeting point. This “proof” used by the other cop was so weak, why didn’t DiCaprio just tell him that it wasn’t that difficult to figure that this building was obviously the one. Otherwise what was he going to do, see a body laying on the street and keep going to the address that he was told and wait there?