It all really depends. If you're in a market/market district, and in a store there with no posted or established prices, just ask the guy how much it is and go for it. If there are posted prices, you'll look ridiculous trying to haggle, not to mention rude, and if you're already getting a very good price on something it's considered a bit rude to keep trying for a lower one. Also, it's important to note the market district bit: most corner stores don't have posted prices but if you try to haggle there you'll be laughed off. If you are in a place where you can haggle, the best strategy is to first find out from an Egyptian friend what a good price for the item is, then go see what the guy wants to charge you for it.
A rough, translated-to-English transcript of the last time I haggled for something (Dylan's gallibaya):
Me: I'm looking for a gallibaya.
Guy: Size? Color?
Me: It is for my brother, he is skinny, like that guy (gestures to other guy in store), any color.
Guy: How's this one?
Me: Okay. How much?
Guy: 155 pounds.
Me: Mmm.... that's a lot.
Me: Maybe 90?
Guy: This is real Egyptian cotton! Good quality! 130!
Me: I don't know... 100?
Do a lot of Egyptians speak English?
Yes and no. Most Egyptians who have been to university speak pretty good English, and a lot of people working in restaurants, markets or any sort of tourist area speak enough to accomplish their jobs. It seems like everyone knows "Hello" and "Welcome to Egypt", as they are often shouted to us on the street. It would certainly be possible to visit Egypt without speaking any Arabic, but I think you'd miss out on a lot.
You said the toilets were small- do they have toilet seats?
Are all dorm rooms singles?
No. The guys' dorms are all singles, but here in the girls' dorms we're two to a room, and some of the Egyptian girls are four to a room.