Wa `alaykkum salaam wa rahmatullaah
Sorry aint got much time to write up an answer, so will just post an answer that I posted in another thread a week ago.
1) "No you do not have to make niyyah like that. Do you not realize O' my sister that when you go into the toilet to make wudoo' you have already intended in your heart to make wudoo'? Do you not realize that when you open your tap of water, or take a bucket of water, you have already intended to make wudoo'. Do you not realize that when you are laying out your prayer mat you have already intended to pray that particular salaah (which actually answers your 1st question with regards to prayer). Thus your intention is made automatically with any intended activity, it does not need any sort of effort or anything of that sort. Ibn Qayyim rahimahullaah said: "If a person has any doubts about not having a niyyah (to do something) then this could be a seen as a sign of lunancy, because a person's knowledge about himself is considered a matter of normality; so how could a sane person have doubts about his actions?" He then goes on to say: " When a person stands up to perform Salaat ud Dhuhr, behind the imaam, then how could he have any doubt about performing such an act? If anyone should ask him about a different matter, he would certainly reply :'I am busy, I am about to perform Salaat ud Dhuhr'. (meaning his heart is certain that he is going to pray Dhuhr, yet he is busy wasting time thinking on how to word his niyyah in his heart or tongue)"
He carries on saying: "What is more amazing to me than all this is the fact that the other people around him would surely know what his intention was from the situation. If a man was seen sitting in a row of people gathering at the time of Salaah, people would surely know that he was also waiting to perform Salaah. And if they had seen him stand up at the time of `Iqaamah, as the other people around him also stood up for it, they would know that he stood up to pray. If he moved forward to stand in front of them, people would know that he was their imaam for that Salaah. Therefore if other people know his inner niyyah (intention) by his outer state; how could he deny it about himself? His acceptance of Shaytaan's whisperings, that he never makes any niyyah (before any act), is an act of belief in the devil, a denial of true facts, a deviation from the Book of Allaah, and the sunnah of His Prophet :saw2: and from the path of the Sahaabah"
2) No it is not a condition to say it, rather it is said to glorify Allaah
