URL structure... more less... question



None of the above. I would actually go for an all lowercase version of #2. I like the hyphens, but never use capital letters in URLs since they can be case sensitive depending on how your server is set up. It's just easier not having to remember which letters are capitalized and which aren't.

Here's a video with Matt Cutts talking about how Google treats hyphens vs. underscores:

YouTube - Should I use underscores or hyphens in URLs?
 
Keep in mind spaces become %20 so the url would look like:
whatever.com/blue%20widgets

and +1 for lowercase with -