I've been playing my DK alt a lot more recently and I have 2 basic questions that I am sure someone can answer them a lot faster than I can find them on my own. I have read the guide in Tankspot's DPS section and the one on Elitistjerks so I did at least try.
How much hit should I be at for Unholy DPS? I see the calculations for what is needed to be hit capped on melee and what is needed to be hit capped for spells. Do I stop at hit cap for melee or do I need to be at the spell hit cap? I am currently at 401 hit using http://www.wowhead.com/?item=47734 .
What I end up doing is IT, PS and then use priority with ScS the highest, BS second and DC third. I refresh IT and PS when they expire. I'm doing 4K dps on single targets in 5 mans so it can't be too bad but is there a good reason to go with the recommended rotation over what I am doing?
You want to be at the melee hit cap as Unholy. Hit beyond that isn't absolutely worthless since it will affect death coil and icy touch, but it's significantly less valuable. You should drop Mark of Supremacy and replace it with something without hit on it (if you don't have anything else, buy the Mirror of Truth with heroism badges; despite the itemlevel disparity it's a much better trinket if you're hit capped). You should also replace one of your str/hit gems with a str/crit gem; this will leave you at the melee cap of 263.
Take the dragon's eye out of your helm and replace it with a str/crit gem, then use the dragon's eye in the blue socket in your belt. Replace the gem in your bracers with a pure str gem (don't match the bonus) and replace your meta gem with the 3% crit/21 agi gem (on its own this is weaker than the one you have now, but since you only need one blue gem to activate it instead of two it ends up being better overall).
The rotations you linked are functionally pretty much the same. You shouldn't really need to worry about a priority queue as unholy if you're hit capped and near the expertise cap, but if that's easier for you to visualize than the rotation that's fine. Just make sure that you aren't using a scourge strike and running out of FU right as your diseases are about to fall off.