Buddypress Install in Subdirectory - Do I need Multisite?

Hi, I have a problem. I have found a theme I love for my main site, but it is definitely not compatible with BuddyPress (UGLY!). So, I think I will need to create a subdirectory or folder for the BuddyPress Community and install another installation of WP and a BuddyPress friendly theme there.

1.) Can you tell me which structure is better? community.mywebsite.com or mywebsite.com/community

2. I would like the BuddyPress community members to be able to contribute blogs in one "category" that would appear on the main website. Could I just link to that blog, or do the Users need to be users of the main WP installation, too?

3. If I wanted the Users to have access to other member features on the main site, would they need to login twice? With the same User name? Or, would it be better to do a MultiSite install? Would that enable just one login and access to User features at both the main site and the BuddyPress subdirectory without having to login twice?

I hope that's not confusing. I'm a little confused. I'd just like some advice on the best way to tackle this.

I'm a new paid member here at WPMUdev and very excited. Thank you!