I've been in a similar situation before but not from the App Store. Since Apple basically collects all the sales revenue and pays out 70% to you at a later time you might actually get a 1099 from Apple as well, so it might be no different than ad revenue. Hopefully someone with App store experience can confirm or deny this.

1099 is the same as any other revenue, you'll have to file federal, state, and city taxes on it just like any other sales revenue, so don't let that affect your decision.

1) Once you're incorp. and have been in business for at least a year the IRS will want you to do quarterly estimated payments, but as an individual, you can stay on the normal April 15 schedule.

2) I would recommend S-corp when your showing revenues of 100K/yr on your schedule C (non-W2 income). With an S-corp you will not be double taxed as you would with a C-corp (at corp level and then again at personal level). With an S-corp all the company profits come to your taxes on Schedule E and you pay taxes on it like you would with a schedule C. But as an S-corp you might be able to get away with more expenses and deductions at the corp level than as an individual