The busier area of SW is now the Dwarven District, since it has a bank/AH very close to each other, and is right next to the portals (not to mention easy access to a forge). But since flying mounts are usable in towns now, you'll see a lot of people just hovering in the air or perching on rooftops, which really reduces the ground population.
As for leveling, just stick with your tank spec. You'll do more than enough damage, and might actually even be more efficient since mobs can actually hit hard now. Though I suspect that's really irrelevant for pallies.
Also, and I stress this, DON'T rush to endgame. A huge portion of their energy went into crafting the quest areas for this expansion. Rushing through them isn't wise. Of course, you also have some catching up to do if you want to raid. I honestly have no clue how the system works in Cata (meaning whether or not you can jump into the current tier raid following heroics, or if you'll need to progress through them a la BC).
Anyways, you all are horrible, @#%^ed up people
Never underestimate the healing power of a massive dong.