Questions about switching to multisite

I have some questions about how to change from Wordpress single install to Multisite. The website in question is: http://www.letstalknevada.com, which is currently a single wordpress install. We also own http://www.letstalknation.com, which needs to be set up as the 'master site', letstalknevada.com will be under that, and more sites in the future as we open up more states (ie. letstalkcalifornia.com).

Questions are:

1 - Can I change the current install for letstalknevada.com to multisite, then make letstalknation the 'master' site, or do I need to set up a multisite install for letstalknation.com then transfer the nevada site to that? (I need to be careful NOT to disrupt the nevada site much, it gets a lot of comments, etc.)

2 - Would you recommend subdomains or subdirectories for this application? The sites will all have custom URL's. (I'll need help getting that set up correctly too..)

Thanks!