Is this option better than the +1 to HP or +1 to Skill Point option.
"Add one spell from the witch spell list to the witch’s familiar. This spell must be at least one level below the highest spell level the witch can cast. If the witch ever replaces this familiar, the new familiar knows these bonus spells."
I'd say for the most part, yes. A spell known is usually more useful than a single hit point or skill point, except at low levels when you can only take cantrips and you should probably assign a rank to all your class skills and make sure you're still alive.
The main disadvantage is that a witch is able to theoretically learn any number of spells if she can find them and transfer them to her familiar, while hit points and skill points can generally only be gained through leveling up. So if you expect to be learning lots of spells on your own, maybe think twice.
On the other hand, if you're playing a CHA-based witch with spontaneous casting like the Seducer or Ley Line Guardian, the racial favored class bonus is a no-brainer due to the limited spells known.
You can always buy extra spells via scrolls if needed.
Depending on the game you're playing, this isn't always the case. Some campaigns may see long periods between visits to someplace where you can buy spells and/or restricts number/type of spells available so in those games it's even better than normal.
Witches are INT based casters so they usually have plenty of skill points available. This would make this option less valuable unless your party is really lacking in skills and you need to cover more than normal.
Witches get d6 for HP so are usually behind in HP. If you have a lower CON than normal like from playing an elf this option may be a good one. You could also take the feat toughness for more or less the same result.
Witches do not have a limit to how many spells they can know, so as other have pointed out this option will often be campaign dependent. In a campaign that restricts your access to spells this is pretty decent. In a campaign that allows access to large amounts of spells this becomes less attractive. Often this comes down to saving you gold.
So look at the type of campaign you will be in. In most cases the skill points will not be the best option. In a combat heavy campaign where your character has subpar HP always take the extra HP for survivability. If the campaign restricts your ability gain access to scrolls take the extra spells. If you are playing in a typical campaign with easy access to scrolls take the extra HP.
|I'm Hiding In Your Closet|
It's worth it once you reach higher levels and learning spells becomes a lot more expensive. It depends on the wealth/treasure level of your game.
To be explicit, it's worth this much by level:
1-2: 2.5 gp
3-4: 5 gp
5-6: 20 gp
7-8: 45 gp
9-10: 80 gp
11-12: 125 gp
13-14: 180 gp
15-16: 245 gp
17-20: 320 gp
The above assumes the cost of familiars communing is the same as the cost of sharing spellbooks and that the option is available. It's much more expensive if you have to buy scrolls.
In our S&S campaign, the only witches I ran into were my own followers. Therefor not much in the high level sharing of spells.
If you need to get scrolls, then it can be really helpful getting those higher level spells with large component costs.
Resurrection material cost is 10,000 gp
Raise Dead material cost is 5,000 gp
Reincarnate material cost is 1,000 gp