My yarn recommendations are always the same - any fingering-weight yarn will do. If you need more details, please see my other patterns, where I list my favorite yarns. It's just impossible to list them all anyway)).
You can add the braids between the cuff and the hand part of the mitten. For the braids tutorial, please see my Braided trim: http://www.ravelry.com/patterns/library/braided-trim.
You just need steps 6-9.