Hi and Welcome

Firstly I like to say I found this site by looking for info like yourself, and I weeded out all the sites from my favourites back to this one.
I live in Australia, so I have to adapt a lot of what I read to suit local conditions/Southern Hemishere etc.

I would recomend reading through the links on the ETS Home page about Disaster Prep and Survival Kits etc. Its a good place to start with a lot of good info, and you can fire questions back in here as you go.

I response to your questions:
1- Watches: I use 2 watches. My main watch is a Seiko Pilot Watch. Over the past 25 years Seiko has been the most reliable I have owned, and this model has a Flight computer around the bezel which I use all the time. (no I am not a pilot) It also looks good.
My second watch is a Casio with a compass, barometer and temperature. (I never use Temp) I use this when bush walking, camping etc. Its a little bulky, and mine is a bit ugly but they have released better looking models now.
My others are left in the draws these days including a 20 year old Seiko still running strong.

Compass alternatives: I have a Silva (Brunton in the US) compass which slips over a watch band, but since buying the Casio it is now stashed into one of my kits.
I have also a Suunto clipper which I found is better. I keep it clipped on the money pocket of my trousers wherever I go with an Ultimate Survival JetScream whistle and it is easily clipped onto a watch or shirt etc when needed.
DONT use your watch as your only compass. When the batteries go flat have a backup ready. Even when I'm bush walking etc I have the Suunto clipper on my pocket and I have an orienteering class compass in my pack. (& GPS)

2- Books: I have the SAS Survival handbook and a Firstaid Manual stashed in my kits but in a waterproof contianer. Its a good book. I also have 98.6 degrees (see Dougs Picks on the ETS Homepage) which I would also recomend.

3- Multi tools: Its a personal preference. If its your first call into some camping stores etc and have a good look at them. I have many. My most used is a Leatherman Wave (old style) which suits me. My Swiss Tool is my second most carried. Its better quality built than the Wave, but doesn't quite suit my everyday. I have others but I wont go into them. See the current forum thread on "Leatherman Wave" for more details and alternatives.

I hope that helps.