1)
At lower gear levels, the Prot Paladin is a much better tank then any DK.
As you gear both of the toons up, they'll each be able to tank any content.
The DK will, with gearing, put out a lot more DPS then a Paladin tank.

If you have casters on the team, a DK (Unholy) can get you a 13% spell power boost.

From a boxing point of view, the Paladin is much easier to use. Make your 96969 macro, and spam it away mindlessly, for strong single and aoe tanking.
The DK because of rune cooldowns, and runic power, will require a much more active role; ie, cannot macro them nearly as easily.


2)
You can pvp with 3x Paladins, but a DK + 2x Paladins will have a much easier time.

Some compositions will keep their distance against the Paladins, such as Mages or Hunters.
And they'll destroy you, with nothing you can do about it.

Once they're in melee, you should be able to take them out fairly easily.
And they won't have many options to get away.

The DK can put them into melee, via Death Grip.
If you're thinking of Arena, this will be essential.
If its odd world pvp or battlegrounds, either approach will work fine.