1. Carbon, since it is updated more frequently, but you can use both of them since bots usually work on both trainers.
2. 3. You should farm for Nulgath's resources (like Diamonds, Un. 13, etc.), Legion Tokens (used for members of Dage's army; you can become one if you purchase Undead Warrior Armor and do Dage's quests; there are some cool classes right now, limited tho, like Legion Doomknight, and also armors and weapons that are really well made) and reputations (for rep classes obviously).
4. Don't worry. As long as you respect some steps, you should be safe and not worry about getting banned. I recommend following this guide: Botting and Cheating guide for AQW.