Should I enable Profile in Drupal for the basic registration (UserName/email) or do all the Profile setting in CiviCRM administration?
I would recommend creating a CiviCRM profile with first and last name fields, and enabling it for User Registration and User Account rather than using Drupal Profile. This way the first and last name entered will be part of your CiviCRM contact data. For more info, see Profiles Admin.
Also see the email discussion Is it better to create node profiles with extra information in Drupal or use CRM ←BROKEN LINK!!