As for how to cook, I'd follow the directions that came with it.
What to cook: I'd do an 8 lb Boston butt the first time. I'd put on a good bit of rub (I'll post one below) the night before. You want to cook until it is done, which means about 190 for a butt. Plan on at least an hour per pound at 210 to 220 F, but it may take up to an hour and a half per pound. Wood chips: hickory, apple, cherry, oak would be good. Not critical as long as it is a hardwood.
That smoker looks like it has a water pan, so drying out shouldn't be too much of an issue. Again read the directions that came with the smoker. If they don't say anthing about basting, you should be good to go. If they say to baste, you can use almost anything: apple cider, beer, vinegar and water...
A lot of BBQing is experimenting and developing your own style. The biggest thing is to get experience and have fun.
Oh, and you're cheating by using that smoker, just so you know.