It can be mind-boggling to start a business if its all new to you. There are many books which address the kinds of questions you have, so do some browsing at your local B&N, etc. Also, you can probably find many online resources for free. Search google with terms like starting your business and tax considerations, etc.
Based on my experience, I wouldnt jump to forming a corporation. Actually, in a normal (i.e., not a subchapter S) corporation, you (as the shareholder and employee) ultimately get taxed twice, once at the corporate level and once at the personal income level. Also, if you are a legitimate business, whether you run a sole proprietorship or a corporation, Im not so sure that running a corporation really gets you significantly greater tax breaks. If its a legitimate business expense, my guess is that you can deduct it regardless of the ownership structure you select. For example, yes, as a sole proprietor, you do pay a bigger chunk of social security (FICA) taxes, but you get to deduct those increased costs as a business expense.
For me, the key consideration in determining ownership structure is not so much driven by tax considerations (although those are important), but asset protection. Why do so many individuals and very small groups of business partners form corporations, limited partnerships, or limited liability companies? Well, I think if you asked them for the number 1 reason why they do so, for most of them it would be that they can protect their personal assets from being taken in the event their businesses go belly up.
As to the chance of getting audited depending on what ownership structure you select, you should be able to learn about the audit oddsmaking online or from the books you consult.
None of the foregoing is legal advice, which raises my last point. Ive seen many people kick themselves for not hiring a lawyer and/or experienced accountant when they made these important decisions. As one friend has characterized it when it comes to being cheap on the frontside of lifetime decisions, pay me now or pay me later.
Good luck, and whatever you do, dont rush into your decisions.