Definitely diesel. The big-block V8’s and V10’s that you need to haul with a gasoline engine are terrible gas-hogs empty and are absurdly bad when you’re actually towing. The diesel won’t take nearly the hit fuel economy-wise and the towing doesn’t stress the engine mechanically nearly as much as it does the gasoline versions. And don’t worry about the price of diesel-- the prices are not going to get higher enough to offset the MPG advantage a diesel has.
As for the biofuel question, commercially refined bio-diesel is generally okay for most newer diesel engines, although it can damage some seals on older ones. What’s usually more problematic is people who use waste-vegetable oil in their diesels, which with modifications and carefully home-refining can also be okay. What you really need to consider about biofuels is their dubious “green” credentials-- in recent months there have been a series of studies demonstrating that most biofuels end up taking a great deal more energy to produce than they yield and have other secondary consequences such as increasing food prices and encouraging deforestation. I personally would say that the higher fuel economy and lower carbon emissions would make a diesel green enough just running on regular diesel, especially with the new ultra-low sulfur diesel being sold here now.