1) I've been making the top-rated MMF from this site for a while and I've had pretty good luck. However, everytime I make a batch I have little chunks of powdered sugar that don't disolve. I even tried sifting my powdered sugar but it still happened. When decorating I pick out the chunks.
Is it something I'm doing wrong?

2) I made a bunch of cupcakes and made fondant decorations. I loaded them all in the box the night before and when I went to deliver them they looked a little soggy/limp. Most of the time my fondant toppers have dried since I made them a few days before. Why does this happen? Is there anything I can do?

I make the MMF that is just melted marshmellows & powdered sugar.

1) knead it more forcefully this will push out the bubbles and it will also help dissolve the clumping pieces of PS

2) if you store it in an airtight container, it will go soggy and limp. Also if its very humid or hot. When you store fondant decorations out in the open air, they harden. If you're making little decorations, you can also add tylose powder or gumpaste to help with hardening, but some people say either you cant eat those decorations or they dont taste great (cant remember which).

re: lumps
Hmm, I do buy generic powdered sugar from Target & Walmart. Maybe I'll try name brand next time.

re: soggy fondant
My decorations were hard and then I placed them on top of the cupcakes in cardboard boxes over night. Is that the problem? When I did these reindeer ears, they were floppy

I have used store brand and name brand powdered sugar and never had an issue. For me the trick is incorporating small amounts of the PS completely before adding more.

I recommend using half gumpaste or adding tylose to help keep them from getting soggy.