A few general noob questions.

[Ludens]

I generally occupy a city if it is from the same culture as my own: in that case there will only be temporary loyalty problems (no culture penalty) and it won't impair the towns economy. Enslaving is useful for larger towns of other cultures as it transports half the population to towns where there will be no or less culture penalty. It also increases the cities trade potential, as slaves provide an extra trade resource for twenty turns, but the halving of the population does decrease tax and trade income a bit. Extermination is only for when I am in urgent need of cash, when I anticipate huge unrest (Egypt is the obvious example for Roman players) or when I don't intend to occupy the city in short run. Killing the population may give you some quick cash now, but it will also severely reduce the town's income for some time.