Should I let my #1 know via email or regular mail??? Any thoughts?? What should the letter include besides telling them I am going to rank them #1?
Appreciate any input.

most programs don't really care, people are lying half the time when they say it according to one PD I talked to. I don't think that any of these letters affects an institution ROL.

If you're going to send a letter now, I would suggest e-mail, since you don't want it to get stuck in campus mail somewhere.