For zeroing those sights, set the sights to mechanical zero...
Turn the front sight post until the bottom is flush with the front sight base. On the rear sight, turn the elevation drum (the one on the bottom of the rear sight) to the Z marking and turn the windage knob until the line on the aperture lines up with the line on the sight base. You are now ready to zero.
Print out the target from the link below, hang it at 25 yards, and follow the directions on which sight (front or rear) and which direction to turn the sight. You will change elevation with the front, and windage with the rear. Once you are zero'd at 25 yards with this technique, I have found that I can bottom out my rear sight, (turn counter clockwise until it stops at the 5/3 mark) and I am good for 50 yards. For 100 yards, you would turn the elevation drum in the other direction, past the Z mark, but I have not shot it at 100 yards with the irons enough to work out the best setting.
Target
http://www.bobdbob.com/~deneb/doc/targets/m4-carbine-zero.pdf
As far as the dots, there aren't huge differences in operation between them. The micro dot type are physically smaller, weigh an ounce or two less. Sometimes the diode on the TRS-25 is in the way for lower 1/3 co-witness. I believe PA addressed that with their red dot.
As far as dot sizes, smaller is not necessarily better. A larger red dot is easier to pick up with your eyes, allowing you to be on target quicker. However, a larger dot will cover more of the target... it really depends what you are shooting. If you are shooting 8 inch steel plates, a 2, 3, 4, or 6 MOA dot is going to let you see some of the target and make hits.
I have a Bushnell Trophy red dot on one of my rifles that has 4 different reticles. It has a 3 MOA dot, a 10 MOA dot, cross hairs, and a circle with 3 MOA center dot. I use the circle reticle on that one the most. Easy to pick up with my eyes. The newer version of this sight has red and green, and can also be picked up for less than $100.
Oh, don't forget mounts in your budget. They can run from about $20 to several hundred... for what you are looking at though, a $20 mount from Primary Arms will probably fit the bill.