Yay for a free tank!
If you transfer over the filter entiely, you will have a small cycle. Shouldn't be more than a few days, as long as you keep up an ammonia cycle. Do you have fish in the 5g? Or is it empty?
I personally prefer white gravel, of the two. I think it looks nice. But, it's really up to you.
You could do a betta or some type of nano-fish. A good link to start out with is:
tiny fish list (around an inch or less) - Vivarium Forums