Just sharing some thoughts:
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Does Apache consumes RAM a lot in compared with Nginx
Yes. When I used to run Apache stack, my memory usage was around 300MB immediately after reboot. Switched to nginx, and it went down to 90MB.
BTW, these numbers are from 3 years ago and the server machine was old. My sites are not high usage websites - just personal sites, 4-5 Wordpress installations and a forum.
At this moment (on Linode), my server ram consumption = 70MB.
Like I said, it really depends what you are running. I barely get ~500k hits per day so YMMV.
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OR should I choose Apatche since most plugins are developed in keeping mind Apache, Like cache plugins.
Possibly. If you want the easy way out, Apache is still the way to go. Custom routings and permalinks can be a pain in nginx - this may have changed since, of course.
Just be prepared to spend some time initially configuring things.
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Should I pay month by month or pay for a year. Since I am new and not sure abut my ability to survive on Linode. Suppose I pay for a year in advance, After 3 month if I do not wish to continue with Linode, Will i get refund of the 9 months (which i have not used). Or their is only a 7 days money back to all plans(durations).
Skipping this because I've done year-by-year payments. Which is dumb since I've been with Linode for years and am still paying the regular monthly prices ~_~;
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3. Is their any way to mirror/clone (/or something similar) woedpress blog with my current host Dreamhost (shared hosting). <<failsafe>>
Not for free.
Your best bet may be to use the Export feature. Then move the directory over, install WP, then Import the XML file into the new database.
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4. Which OS should I opt. Stability, Security, easy to configure is in my mind. I have planned to install Ubuntu but confused about version:
I stuck with the latest Ubuntu release because of the regular updates. Used to install each piece of software individually and it was a pain to keep up with updates. Then when I switched to some other distro, I always had to hunt for third party repos in order to keep up to date with certain software.
Now, I just do the whole "apt-get update/upgrade" step.
In terms of stability and security, I've not had any issues for the past 3-4 years since I started using Ubuntu. You should never depend solely on a base OS setup - you need to take the proper measures to secure your server. The Linode Documentation site has some guides for this.
Hope this helps.
M.