I like my ninja. I use him with martial arts and dual throwing weapons as a backup. I do not get as many instant kills as I would like but that is probably due to my not pumping senses since my ranger with 100 senses is getting criticals a lot.
As to your specific questions,
1. The best ninja is whatever you find the most fun. Personally I would not like a faerie ninja no matter how powerful the CoC is. My ninja is a Felpur with almost maxed speed at lvl 11.
2. Ninjas AC rise with both Speed and Stealth. You can also get more AC by maxing Dexterity to get Reflexation. A ninja with the appropriate cloak, amulet, and rings can have a great AC despite the crappy armor.
3. I started out making a purely throwing ninja but by the time I hit Arnika and realized the amazing lack of thrown weapons I had to scrap that Idea. Right now I use both throwing and martial arts and it was working out great.
4. The most effective skill for the ninja is martial arts. You can get more attacks per round which equates to a better chance for an instant kill. The only reason to play a ninja is for the instant kills as far as I am concerned. If I want raw damage I would have to go with a fighter or monk.
Hope this helps.
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