They don't have prey drive, they have herding drive. A well bred sheltie is highly HIGHLY unlikely to demonstrate kill-bite; they can certainly be nippy and they may certainly be mouthy, but most of them are not going to have a predatory grab-bite either. If a sheltie has a grab-bite it's a concern. Can't herd sheep when you're trying to chomp a chunk out of them! I really don't think you'll find many well-bred shelties with prey drive. Even when Auggie once snagged a young bird out of midair, he did not bite strong enough to do any damage to it.
Proper temperament is a dog who is not shy. Like Laur said, a sheltie may be initially aloof towards a stranger; "reserved" is how some people describe it, because some shelties really don't care about strangers. They can become very one-person dogs where other people are not really important (not all are like this though.) But shyness is not at all acceptable though as she said, it's incredibly common. They should be sociable dogs on the whole that you can take anywhere and everywhere.
They should be incredibly smart and they should also possess a certain level of boldness. There is a very wonderful and accurate description of proper sheltie temperament in the book "Sheltie Talk" but I am at work right now and don't have it at hand to type up more of what it says. Anybody who is seriously considering a sheltie should find a copy of the book and read it. In the book she speaks about how she has no use (I believe she says precisely "no use," actually) for a dog who is soft and crumples under stress and pressure - and if you think about a sheltie working and herding, softness in the breed doesn't make any sense, which I believe is why she says she has "no use" for a soft sheltie.
Health problems include hip displaysia and to a lesser extent elbow displaysia; PRA and collie eye are both present in the breed, as is VWd. Thyroid testing is also a nice thing to see.
Auggie does all right in heat as long as he has plenty of free access to water. Their fur does protect them a little bit from overheating... I don't think they are really much worse off than a lot of breeds with the heat. Individual dogs may be more wussy with heat than others though, LOL, just like people are.
Adaptable is really the key word with the sheltie. A very young sheltie won't be happy being a couch potato but as they get older they are pretty cool with hanging out inside bumming around as long as they are with their people. Otherwise if you are the kind of person who wants a dog to go running with, a sheltie will most likely go running with you; if you really just want to go for a walk, they'll go for a walk and be fine with that too. Mental stimulation is more important than anything else and if you can provide that, you should be just fine. That said, they aren't the dog for everybody. They are herding dogs and as such they are unique and quirky dogs. Spend some quality time with several of them... you'll get a handle on "quirky" pretty quick and figure out if it's something you can deal with, LOL.