1)When installing oracle, what would be the best option-create and configure a database / install software only(later create database using dbca) ?why? Just want to know if there will be a difference at all in these 2 methods.
I would suggest to only install the software first, then create an empty database using DBCA. Many people have reported issues with installing the software and creating a database at the same time - search these forums. There is no difference if you create the database at the time of software installation, or later using DBCA.
2)What is the best way to migrate the data in the database, datapump or rman (rman takes full backup in the present "live" so this can be moved to "new live" and can be recovered)? What would be the method with least downtime?(Once the data is transferred, the database in the "old server"will be deleted)
What measurable metric defines "best" ? Answer depends on what your requirements are, how big the database is , and how much downtime you can afford. See the various options in MOS Docs 752986.1 and 790559.1
3)The structure of the data files (folder path) are going to be different in the old and new servers, so I have to precreate the tablespaces, so will the impdp fail in this case?
If the tablespaces are the same, impdp will not fail.