2. If you are severely constrained in terms of bandwidth, you can consider the OTA update method, however you should consider that this is advised against by many jailbreakers including the developers of the evasi0n tools. Using the OTA method on the device will generate an APTicket component of your SHSH Blobs which cannot ever be re-used in the future. Whilst your install and jailbreak may well work, IF you need to use your SHSH Blobs in the future it is highly likely that they will never work. If you are happy to live with this potential risk, then using the OTA method via Settings > General > Software Update will give you the minimum install download.
3. Restoring or updating via iTunes will take longer as it utilises the full firmware file, but this will result in you having full valid SHSH Blobs which may be of use in the future. The process is also potentially less prone to introducing errors via the update process.
SHSH Blobs FAQ