Currently I am helping someone add and remove a few things from MegatonPlayerHouse cell. Since this is the only stuff I am planning to change, which of the following is the best way for this.

1) Should I take his Fallout3.esp file and make the changes to that and send it back.

2) Open fallout3.esp and make plugin.esp from that and send him everything, including unmodified cells.

3) Make a plugin based off my fallout3.esp and delete every cell in it, except megatonplayerhouse and make the plugin.esp a small addon.

Thanks again for the help, but I am still new to modding and not sure what the most efficient or proper way to do this is

There is no Fallout3.esp. The main game file is Fallout.esm. When you make a mod for it its saved as YourMod.esp. So just make an esp file and simply send you friend that with all the little changes. Theres no need for your friend to send the whole esm as its the same as yours. I think you just misunderstand how the files work. The main game file is a master file (esm) and you can make plugin files for it (esp). The plugin file is very small and only contains the changes you made. None of the unmodified content is saved or transfered at all. I hope this helps.

So I assume it would be smarter just to load up G.E.C.K, my fallout3.esm, then delete everything out of it I don't need, and save that as an .esp?
That way my .esm stays the same and the new .esp file only has what I need?

No no no no... Open up the geck, and load your fallout.esm, then JUST MAKE YOUR CHANGES. Do not, I repeat, Do NOT delete everything you dont need. How an esp works, is whatever you change is saved into the esp. The rest of the game is NOT AFFECT WHATSOEVER. So if you simple add a pistol to a place, the only thing the esp saves is that the pistol is there. Then, when you activated the esp in the Launcher or FOMM, it adds the pistol. So just make your changes and save as esp, then send that to your friend.

You make absolutely NO changes to the game when you make a mod. What you are doing is 'modifying' the game. Nothing is actually changed until the game loads and your mod says, include these modifications into the current game. The master file has not changed one bit. What has changed is your game experience.

Adding on to what he said, if you were to, say, delete a chair it would only save that information that you deleted that chair. Nothing more. This way if you decide that you miss the chair being there, and want it back, you can just deactivate the plugin file or delete it.

I think you're misunderstanding how it works slightly.

There are two kinds of files that the engine takes: Master (named .esm) and Plugin (.esp).

Plugin files are made in the geck, and when you edit an esm, it saves ONLY what you change into a plugin file.

So, say there are three related items in a master file. A house, a gun in the house and the ammo for the gun.

If you change the gun's statistics, then save your file, the plugin contains only one item: the new gun, the ammo and the house are left in the master file, untouched. For that matter so is the original gun, because you can't edit the master file directly any changes are saved into a plugin file that temporarily overwrites the base game at runtime without permanently changing anything.

Imagine a mod as an overlay, it contains information that temporarily is used in place of or in addition to data in the base game master file.