Yup, orally. And do it when you first wake up, before you talk or get out of bed. That way you get close to your resting temp.
Yep, this. Or you can do it vaginally, which is meant to be the most accurate, but it has too much of an ick factor for my liking. The key is to do it the same way each day (with the same thermometer) and to take your temp on waking before you do anything! Fertility Friend's charting course will teach you all of this - if youhaven't already done it, I highly recommend it.

As for the 2 decimal place thing, my first BBT thermometer was only 1 decimal place and worked just fine.