Это невероятно!

A natural pronunciation is:

Éto neveroyátno!

More approximately for an English speaker:

EH-tuh nee-vye-ra-YAT-nuh!

Notes:

• Это has the stress on the first syllable: Э́то
• невероятно has the stress on -ят-: невероя́тно
• In fast speech, some unstressed vowels sound weaker than they look in spelling.

In this sentence, это means something like this, that, or even it, depending on context.

Russian это is very flexible. It can point to:

• a thing: Это невероятно! = This/That is incredible!
• an event or situation: You did all that in one day? Это невероятно!
• something just mentioned: He survived? Это невероятно!

So it does not always map neatly to just one English word.

Because here the word is being used as the predicate in a sentence meaning It is incredible or That is incredible.

• невероятный = the adjective form, used before a noun
  
  • невероятный фильм = an incredible film
• невероятно = the short neuter/adverb-like predicative form used in expressions like It is incredible

So:

• Это невероятно. = That is incredible.
• Это невероятный фильм. = This is an incredible film.

This is a very common pattern in Russian.

It looks like an adverb, and historically it is related to one, but in this sentence it functions as a predicate word: it describes the whole situation.

Compare:

• Он говорит невероятно быстро.
  Here невероятно is an adverb meaning incredibly.

• Это невероятно.
  Here невероятно means (it is) incredible.

So the same form can behave differently depending on the sentence.

Yes, absolutely.

Невероятно! is very natural and common. It means:

• Incredible!
• Unbelievable!
• Amazing!

Adding это makes it a bit more explicit:

• Это невероятно! = That/This is incredible!

Both are correct and common.

It is neutral and very common. You can use it in:

• everyday conversation
• writing
• reactions to news
• emotional speech

It is not slang, and it is not especially formal either. It works in most situations.

Yes. Very often это refers to an entire situation or statement.

For example:

• Ты пробежал марафон без подготовки? Это невероятно!
  Here это refers to the whole fact that the person ran a marathon without preparation.

This is extremely common in Russian and works much like English That’s incredible.

The standard order is:

Это невероятно.

You usually would not say Невероятно это in normal speech unless you were doing something stylistic or poetic.

Russian word order is flexible, but this sentence is so short and fixed in feel that Это невероятно! is the normal version.

If you want extra emotion, you would more naturally say:

• Это просто невероятно! = This is just incredible!
• Это совершенно невероятно! = This is absolutely incredible!

They are related, but not used in the same way.

• Это невероятно!
  = That is incredible!
  This comments on a fact, event, situation, or unspecified thing.

• Он невероятный! / Она невероятная!
  = He’s incredible! / She’s incredible!
  This describes a specific person.

• Это невероятный фильм.
  = This is an incredible film.
  Here the adjective agrees with the noun фильм.

So if there is no noun, Russian often uses невероятно. If there is a noun, you usually use the agreeing adjective form.

Grammatically, people would understand you, but it is not the most natural choice.

Russian more naturally says:

• Это невероятно!
• Это просто невероятно!
• Это совершенно невероятно!
• Это абсолютно невероятно!

Using очень with невероятно is possible in some contexts, but it often sounds less idiomatic than the options above.

The direct negative is:

Это не невероятно.

But this is usually not very natural, because it sounds like It is not incredible in a very literal, contrastive way.

Depending on what you mean, Russian speakers often prefer:

• Это обычно. = This is ordinary.
• В этом нет ничего невероятного. = There is nothing incredible about it.
• Это не так уж невероятно. = It’s not that incredible.

So the simple negative exists, but other phrasing is often more natural.

Yes, it affects the tone.

• Это невероятно! = emotional, excited, amazed
• Это невероятно. = the same basic meaning, but calmer or more matter-of-fact

In speech, the difference is mostly in intonation rather than grammar.