Build Recurring Income

I am a US Citizens living abroad. I am in the process of filing tax return for 2008 for foreign earned income based on IRS' publication 54. Our earned income has already been taxed once by the country we live in.
I see that there are two ways to avoid double taxation on your income -the foreign earned income exclusion and the foreign tax credit.
Can somebody please explain the difference between the two and point out advantages to use one over another?

I didn't see it on the website. Is there an income guideline for number of people living in the house compaired to the income, if so what is it (where can I find it)? Thanks!~

I've already accumulated about $45,000 in short term capital gains this year. I need to liquidate another $40,000 in stocks or sell part of an inherited IRA which, as I understand, will be taxed as income. Is the tax hit going to be the same either way?

Last year I had taxable income of about $53,000 with next to no capital gains. This year I expect about the same taxable income plus the capital gains.

A and B are partners. at the beginning of the current year, A's capital account is $30000, and B's is $50000. A and B decided to allocate income with 10% interest on capital balances at the beginning of the period and divide the balance equally. Net income for the current year is $80000. Each partner withdrew $150000 for personal use during the year. What is the amount of income that will be allocated to each partner?