Saving seed in and of itself is not illegal. However, when farmers choose to purchase GM seed, they sign an agreement stating that they will use the seed solely for the planting of one commercial crop. Farmers understand this when they make the choice to purchase the seed. Any farmer who doesn’t want to agree to the required provisions can choose to buy another type of seed as there are many other seed varieties in the marketplace.
Regarding your second question, GM crops produce seeds just like conventional crops. Despite reports to the contrary, none of our companies sell GM seeds that are sterile. We previously answered a similar question about sterile seeds or Terminator seeds here: http://gmoanswers.com/ask/i-keep-reading-about-how-monsantos-seeds-and-other-gm-seeds-become-sterile-and-unusable-farmers.
Regarding your question on biodiversity, Martina Newell-McGloughlin addressed a similar question here: http://gmoanswers.com/ask/how-biodiversity-impacted-introduction-gm-crops-are-current-set-crops-being-replace-smaller-less.
If you would like to understand more about the patenting of GM seeds, please see Professor Drew Kershen’s explanation here: http://gmoanswers.com/ask/does-%E2%80%9Cpatent%E2%80%9D-allow-private-company-own-seeds-created-0.
If this doesn’t address your exact concerns, please feel free to ask another question. Thanks.