Is it possible for POW block reward to ever reach 0? or is there some system in place where the block reward is sustained, like 1 coin per block (zetacoin would be a good example).
In short: no; math says no, economy says no.
Mathematical part:
The reason for PoW to be always >0 is that the coinbase reward is a function of the hash rate. And the difficulty is a function of the hash rate. If the difficulty goes 2^n, the derived coinbase reward is multiplied by 2^(-n/4).
As 2^(-n/4) can’t reach 0 (although arbitrarily close to it), the PoW coinbase can’t reach 0 PPC.
You could argue that it could be lower than the smallest possible unit (10^-8 PPC). While this is theoretically possible it won’t even come close to it, because of economical aspects.
Economical part:
the coinbase reward will stay much higher than 0 PPC, because it simply doesn’t pay out to aim that much hash rate at Peercoin’s PoW process. That will stay true even if the price per PPC will be much higher that it is now (admittedly the hash rate will be at a different level if the coinbase reward is higher…).
If the POW or POS reward is less than the tx fee (0.01PPC) a 0 PPC block will be generated. At least 0 PPC POS blocks have been spotted before.
It doesn’t look like fees are calculated for generating PoW blocks:
…PoW blocks which include transactions need to carry the 0.1 PPC / kB tx fees for those transactions…
“PoW blocks which include transactions need to carry the 0.1 PPC / kB tx fees for those transactions…”
—> what does it mean to “include transaction” while not contributing to the security?
I don’t understand your question.
PoW blocks aggregate transactions as well as PoS blocks do that.
The validity of the PoW blocks is guaranteed by the PoW that needs to be done to create the block.
In my understanding, including a transaction means to check for its validity, hence contributing for the network security - but we know that PoW do not participate to the security.
PoW blocks do not contribute to the bnChainTrust value.
My understanding is that this value is needed to determine the proper chain in case of forking (to defend against double spending attacks).
The validity of a PoW block is guaranteed by meeting the difficulty when creating the block.
If you want more information about that, I recommend reading this post http://www.peercointalk.org/index.php?topic=2606.msg22156#msg22156 or the whole thread 
All righty -
[quote=“masterOfDisaster, post:4, topic:3144”]It doesn’t look like fees are calculated for generating PoW blocks:
…PoW blocks which include transactions need to carry the 0.1 PPC / kB tx fees for those transactions…[/quote]
This is a zero-reward POS block : https://peerchain.co/blocks/117408/1