1. Well, it depends on your own preferences. I prefer to keep my phone for urgent calls (like 911 in case of emergency or letting my wife know where I am now) and have a separate GPS unit for tracks, though I have a lot of friends who are just hiking using their phones/tablets for navigation. In my opinion, too much can go wrong with a tablet, the OS can get unstable, the app can crash etc. With a dedicated device it's much easier to navigate, and yes, it doesn't have any bells and whistles but it works well for a single purpose - navigation. Once again, I'm talking from my experience. As for capabilities, Mineral2 already said that the quality of phone navigation is quite decent, works offline pretty good and such. The choice is yours.
2.As for Garmins, here are my two coins - I'm quite happy with both Oregon (slightly cheaper, about $400), and Montana (about $550). Both have touchscreen, color display, have similar battery life and support geocaching, but Montana's screen is bigger.
Good luck choosing.
