ok if a lily goes up against a U insect when u pay for the 3000 boost does it go down because of the insects effect?

If your talking about UI lvl 5, no it doesn't, it just reduces IFL' s 400 atk to 0, IFL's effect applies during the damage step, which is very unlikely to be reduced

In the situation, IF Ultimate Insect Lv 5 was summoned by Lv3, he would drop Lily's atk to 0 from 400. When Lily goes to attack, and pays to boost, Ultimate Insect STILL Reduces, since she boosted she would be at 3400, then take away the 500 for Ultimate Insect, leaving her at 2900.

Or I could be off, and since Lily is at 0 before her boost, when she boosts her attack would just be 3000.

The main reason is because Ultimate Insect's reducing of atk is a continous effect, which will always be in effect, even if the opposing monsters change their atk levels by some means. It recalculates, and goes on as normal.

Injection Fairy Lily will be at 2900 if it attacks then uses its effect. Anytime a monster would become negative, you simply count the ATK as 0; however, if a modifier increases its ATK above 0, those negative numbers begin to apply against the added ATK.

It's pretty much the same situation as if you equip Injection Fairy Lily with a Shooting Star Bow - Ceal.

Ceal will reduce Lily's ATK to 0, but when it attacks and uses her effect, the attack is still recalculated, so she will only have 2400 ATK (400 - 1000 = 0 {really -600] + 3000 = 2400)

*gives Halfdemoninuyas, DMknight, and VenomLord a cookie*

You guys are right. i actually had a lengthy conversation about this ages ago with some netreps. as it stands an atk can never be a negetive value so any atk modifiers that would result in an atk be reduced to a negetive is 0 instead. however that negetive still exists. so if a modifier later on would increase the atk you must inclue that negetive walue as well. the atk is 2900 in the above situation.