I need ur experience to tell me which one would be better
You are asking ridiculous questions - we cannot possibly guide you remotely through a tricky advanced subject when you don't understand the issues.
RGB - Red Green Blue
YUV - aka "YCbCr" luminance (brightness) and colour difference. The Y channel has green predominating, with red being the next component, and blue trailing, roughly modelling the response of the human eye.
and what I will be using RGB or YUV?
Well YUV makes extracting a simple monochrome image easier, but RGB makes picking out primary colours easier.
What do you want to do?
If you want a jaw-dropping "you did that, with that?" project, carry on using the Arduino.
Expect many weeks of frustration and baffling terminology.
If you want a rapid intro to "image processing", use an over-powered platform like a PC and get a copy of RoboRealm.
There are many ways of skinning this cat, but first you have to define "cat".
You're going to need some logic level converters for a start.
These devices were built for mobile phones and operate on lower voltages than the Arduino.
@bld: I2C is used for the settings, you're right, but I can't see a minimum clock speed spec, so I don't see why you shouldn't use an Arduino to read the image data.
edit: on second reading, I think the clock requirements for this part are beyond an AVR - the Dclk signal is an output from the camera. The datasheet is rubbish - it doesn't tell you what half the I2C registers do. Some I can guess, but stuff like DINCKSW?
Looking at these methods of logic level converter http://www.sparkfun.com/commerce/tutorial_info.php?tutorials_id=65
I came up with few questions... like in which pins I put the resistors ? Basically I don't know which camera pins to connect with which board pins
of the arduino board. Which pins should I connect to the power source? whats their polarity? How do I send a message to take a snapshot? From
which pins I receive the RGB colors of a pixel? From the dataout pins that I will receive the RGB colors of each pixel I will get them in what order?
Are more than 1 pixels sent to my board at the same time? Should the dataout pins connected to digital arduino input? Do I have to purchase
any microcontrollers or anything else? Rather than logic level converter do I have to do anything else?
I don't believe there is enough information in Sparkfun's datasheet for this device to answer your question (which, I notice, you have started another thread to ask. Please don't cross-post, it just wastes time.)