Serial link between Arduinos

Easiest way is to connect the TX to the RX and vice versa.
Nothing else is needed. Just use the standard Serial stuff.

How does the power work? Do I connect one through USB and the other through a power adaptor? Or do they both run off a shared connection (if not, do they have to have a common ground?).

Which data type is best for exchanging values from 0 to 255, DEC?

Cheers,
Sascha