I tend to use 320kbps MP3… the 320kbps mens that it will be approximately 32 kilobytes per second, and this is quite sufficient for DJing – many people (including some top DJs) say they can’t tell the difference above 192kbps, but the size difference is not so huge that it hurts to go for top quality.
I’m a pretty new DJ, so I’ve been focused on just free music – almost all of it I found on Soundcloud. I am not aware of there being a filter to just show the free stuff, but if you look at the tracks, you’ll see a download link on the ones that are free. Sometimes, they might instead have an external free download which usually involves giving the artist a like on Facebook. These both have worked very nicely for me, I have a tidy set of tracks in the style I’m starting out with.
If you are a VirtualDJ user, you can also subscribe to what’s called “Content Unlimited,” this is a service that uses Grooveshark so that you can find a very large amount of commercial music and load it into your VirtualDJ collection and play them. It doesn’t have everything, in particular, I noticed there doesn’t seem to be a lot from The Beatles (which would be something you might expect to have requested at a Wedding, which is why I thought it relevant). Still, it seems like it would be worth the money if you are expecting to get any requests.
The YouTube option is bad not only because of the illicit nature of it, but also because the sound quality is really bad. If you were to perform live with that, your mix would suffer for it.
I wasn’t able to address all of your questions, in particular, I don’t know much about Beatport at this point, but I hope this information is at least somewhat useful.
.
