It's difficult to answer because the sort of questions you're asking require us to decide how your application will work. You have to do that yourself and make appropriate design & programming based on your decision.
As for display of HABTM records, I usually use checkboxes or some graphical readonly equivalent.
My suggestion is that you look around the web to see how it works on other sites - social sites like Flickr and Facebook are a good hunting ground as they have lots of groups, categories etc.
Leo
2010-10-29 17:07:02