Hey man, its understandable to be a little overwhelmed especially since theres so much information out there.
I would say the best way to go would be a pandora battery and MMS. There are alot of guides out there but the 2 i would suggest are hercules guide in the guide section and my guide at
Tweaks & Projects
Your concern about the slim battery is unfounded since you can still turn a slim battery into a pandora. If you dont think you have the steady hand with a soldering iron then you should consider buying one, that way you can have a good one even without risking your original battery.
A magic media stick is easy to do since its all software.
Now in regards to which firmware rev to use, its your choice. The newer fw revs have all the bells and whistles from sony, their only downfall is that some of the older homebrew apps are not compatible with new fw.
The downfall of older cfw is that some of the new games will not work with them.
Just install any cfw you can get into your psp, once you have cfw you can change revisions as many times as you want to find the best one for you