How to make cakes with dolls in them?

Choc biscuit is fine. If you are using a real Barbie you must either remove the legs or wrap them well in clingfilm for example. If you are leaving them on you will need a hole in the centre of the cake, put a cardboard tube like a kitchen roll holder again wrapped in clingfilm into the centre of the tin when filling with the chocolate biscuit cake.

If you are using the doll with legs make the cake high enough to cover the legs, Barbie has long legs! You can buy dolls picks which are basically the top half of a doll with a spike on bottom to stick in cake, you can get them in any Decobake shop and probably other places too.

I would decorate it with ready to roll fondant, you can get it in Tesco or Dunnes have pre coloured packs too.

Easier in so far as you could just decorate it with buttercream and not bother with the fondant maybe. Choc Biscuit has the advantage of being very firm when made so can be easier to get a good finish on the icing and can be made earlier than a sponge giving more time to work on it. Personally though I prefer cake to be cake and not smushed up biscuits but that is just my preference

P.S. You could just cut the hole out of sponge for the dolls legs with a scone cutter or similar. Bake enough layers if going that way and having real Barbie, don't want the dress starting somewhere around her hips which happened to me once, she has loooong legs!