With a ten dollar deposit, I'd suggest 1/2nl definitely The number of tables is really up to how many you can handle, but I'd suggest just running 2-4, with a minimum buyin on each.
The play on micro tables is bad enough as it is, you shouldn't have much of a problem gaining profits, especially using a basic ABC style of poker.
As far as how you played out the hand with KK. akaRobbo hit the nail on the head. Raise flop, raise turn. By flatting, your allowing villian to draw out on his terms and cheaply. Your obviously ahead on that flop and will win the majority of the time against a flush draw, so why not get the chips in there? It's +EV in the long run.