Me and two friends started playing WoW. One is a Paladin (Protection), the other is a Warlock (Affliction). I'm leveling a priest and am the designated healer. Which spec, Discipline or Holy, is better for leveling? We will mostly be doing dungeons but also some battlegrounds.

best thing you can do is play until lvl 30 as which ever spec you want doesnt make a lot of difference til lvl 50ish anyway. then visit your class trainer and buy duel spec for 10gold (easyly made from the AH selling items gotten through the gathering profs) that way you can lvl however you want and be a healer.

as to your other question which is better holy or disc it all depends on which you prefer playing as they're both pretty much equal