I had W's for a whole semester, plus a couple more in other semesters. Don't sweat the W's too much, but definitely work to get that GPA up.
As for the grade replacement, I would be vary wary to say that most schools do that. Some do in fact replace one grade for another (regardless if it's better the second time around), some average the two grades, and then others will tell you to pack sand...you made your bed, etc. Always, always, always check with the institution and specifically, the college or school of the institution you are attending.