The build is alright, save for a few things:
-Drop that 1 point in Divine Strength. Divine Intellect is far superior, but anyway you shouldn't start spreading points in two trees yet, stick to Retro.
-Imp BoM vs Benediction I'd take Benediction personally. Saves you mana and thus allows you to run around killing stuff longer before you have to sit to drink. In the same line of thought I'd always keep BoW on me instead of BoM, again to avoid running OoM too fast. The extra DPS is nice but I prefer to last longer rather than burn things faster and rest all the time.
-Parry is nice for survivability or tanking but the 2 other talents are probably more suited for grinding and daily tasks. Keep those unless you tank a lot or think you die too fast for some reason.
As for "which type of Dwarf levels the fastest" I take it you mean class? Or did you mean which spec as a Dwarven Pally?
Class-wise I'd say Hunter or Rogue.
Spec-wise it's been said countless times: 1-35 Retro, at 35 you may want to switch to Prot for AoE grinding or remain Retro to continue soloing/questing in the same fashion. Holy becomes somewhat viable once you hit Outland, but I suppose Retro/Prot are still faster.