Does the sub-panel seem over loaded? If so, I could keep the water-heater in the main panel and free up space in the panel another way.
Seems reasonable to me. Most of the equipment won't draw anywhere near the overcurrent rating, at least not during normal operation. Motor loads will draw a higher current on start, but you shouldn't have a problem.
I know I need four-strand wire to run to the sub-panel (2 hot, neutral, ground) but copper or aluminum and what gauge?
You can use either copper or aluminum, though I recommend copper for DIYers. Copper is quite a bit more expensive, but it's easier to work with (in my opinion). If you feel confident working with aluminum conductors, you can save some money using it.
I've covered the topic of feeder sizing here, so I won't go into detail. If you're using copper, you'll want to use 3 AWG conductors. If you choose to use aluminum, you'll need 1 AWG conductors.
If you want to run a single cable, instead of individual conductors in conduit. You can buy what's called 3-3-3-5 SER cable (1-1-1-3 for aluminum), which will contain three 3 AWG conductors (hot,hot,neutral) and a 5 AWG grounding conductor.
When I run the wire along the floor joist, does it need to be secured to the joist or can it just hang there and rest on the drop ceiling? Seems like it should be secured to the joist with wire hanger or something.
You'll have to attach the cable to the joists, using 1 - 1 1/4" staples or other approved means. Check the packaging, to make sure they are rated for the size cable you're using.
What are the things about this project that I don't know that I don't know. :) These are the scary things IMO...i.e. the questions I don't know enough to ask.
The cable you'll be working with is thick and heavy, and it's not going to be fun pulling it. You'll probably want a couple helpers, to help you wrangle it.
Make sure all your connections are tightened to the manufacturer's specified torque.
If you choose aluminum conductors, make doubly sure you tighten the connections. And don't forget the anti-oxidant.
Come back a day or two after the panel has been put into service, and tighten any connections that need it.
Don't forget to remove the bonding jumper between the grounded and grounding bus bars.
You'll need clamps big enough for the cable, to secure it to the panels.
should I put a 100 amp breaker in the sub-panel to act as the "main" for the sub-panel? Or is the 100 amp breaker in the main panel sufficient?
You can usually pick up a main breaker panel, for about the same price as a main lug only (MLO) panel. In my opinion, unless the secondary panel is next to; or within sight of, the main panel. You're better served to install a main breaker panel. It simply offers better protection during maintenance, or other work within the panel.
For example. If you turn off the feeder breaker in the main panel, and start working in the secondary panel. Somebody could easily come along, and flip on the feeder breaker. Since you can't keep an eye on the breaker, you can never be sure the panel will be dead. (unless of course you're using a lockout like you should).
If the secondary panel is in a separate building or structure, then you either need a main breaker, a main disconnect, or the ability to disconnect all ungrounded conductors within 6 or less hand moves.
Best Answer
Some initial notes
You can run any amperage you please to the garage.
That thing you're running to the garage is on your side of the meter, so it's feeder not a service (that's why 310.15(B)(7) says "service and feeder").
If the garage is a separate building (i.e. if the meter is NOT mounted on the garage building), then you need a local disconnect at the garage. It does not need to be outdoors. The cheapest way to get a local disconnect is to select a breaker panel that has a main breaker, the size of the main breaker does not matter. Literally anything will do, so if you like a panel with a lot of spaces and those only come in 200A, that's fine.
The wire has to be actually rated for the specific known load that you are driving, or the load calculation you have done. But if you don't have a specific load in mind or just want to exceed those minimums, you can run any size you want.
You must protect the wire with a circuit breaker, but you get to "round up" in breaker sizes. If the wire is rated for 115A, you get to use a 125A breaker. There's one exception: your feeder never has to be bigger than your service wire has to be (as per 310.15(B)(7)).
Feeder in these ~100A sizes should be aluminum - it's what any electrician would use because it's 1/3 the price of copper. The panel lugs are aluminum anyway. (aluminum lugs are the "universal donor", they play nice with both copper and aluminum wire). So I'll be talking aluminum sizes.
Ready?
You don't need a breaker in the main panel if you simply bring over the full 200A to the garage. Why would you do that? Well, what else would you do with it? You don't have anything to power at the main panel if the only things on it are cameras and lights.
However the trick would be attaching 200A wires on the load side of the main breaker. For this you'd need a main panel with "through-lugs", or a "Subfeed lug" that clips in like a regular breaker, or an actual regular breaker that is 200A. They must be made for that panel; you can't use off-brand devices (except for things UL-Classified for your panel, but nobody makes what you'd need).
But if you can do that, then you can carry 200A from the main panel to the sub on 4/0 aluminum wires. This is allowed because 310.15(B)(7) allows 4/0 for the entire service, and you don't need any bigger than that.
There's no need to enlarge the wire for voltage-drop reasons; it isn't far enough to matter.
If you want to carry less than 200A, e.g. to save money on wire or because there's no way to get lugs of 200A breaker... then simply use a breaker appropriate for the wire size (rounding up to the next available breaker): #2 aluminum = 90A, #1 aluminum = 100A, 1/0 aluminum = 125A.