Granted my experience is somewhat limited but I'll give it a shot...
Is an Immolator a good choice for a Witchhunters army?
To me, it depends. As a trasport for a regular squad of SoBs, no. I'd rather take bigger squads. There are only two ways that seems to be worth considering in my mind. First, if you take an Immolator with a squad of Dominions kitted out for anti-tank. This way your Immolator, with either the heavy bolters or flamers can clear infantry from your approach to an enemy tank, thus allowing your meltas to go to work without having to shoot through an infantry squad. Second, a Cannoness and her retinue, if you're keeping it small. This to me, would be more for fluff reasons like a cannoness would want to ride in the shootiest/burning-est vehicle in town. Either way, seems like a pricey investment when Rhinos are so cheap and can do the job just as well.
Which is the best choice for Immolator weaponry: flamers, heavy bolters, or multi-meltas?
I'd go with either flamers or HBs. The Exorcist is plenty of long range anti-tank firepower, so a multi-melta isn't necessarily needed, unless you aren't taking Exorcists, in which case I would say "Why aren't you taking any Exorcists?" Heavy Flamers are good because you can do drive by burnings and don't have to worry about rolling to hit. Plus the statline on a HF denies most armies their armor saves. HBs are a good second choice. You'd have to have a whole friggin bunch of heavy bolters for me to think you've got too many.
Is a Dominion squad a good choice for a Witchhunters army?
Like many SoB units, if you can get them into shooting range quickly and stay there, they have the potential to be very effective. However, a squad packing 4 meltas is going to draw a lot of fire, which brings me to the next question...
What is the best way to equip a Dominion squad?
I would assume that you have some good squads of regular sisters with bolters, so kitting Dominions out with Storm Bolters seems like a waste. Yeah they'll move and shoot and what have you, but a big squad of sisters in a rhino can do the job just as well. Flamers, well same thing there. Sisters have a lot of weapons for killing light to medium infantry in their arsenal, but if you want multiple shot, high percentage anti-tank/terminator killing ability, the Exorcist is the only option besides an Inquistor with a bunch of Multi-Melta gun servitors, Retributors, or a melta'd out squad of Dominions. A min/maxed squad of Dominions is similar in cost to a equivalently kitted out Seraphim squad. Given a choice between the two, I'd take the Seraphim.
Anyway. I hope that helps a little bit.