How are Minor Improvement and Occupation cards meant to be selected for play?
The decks you use are completely at the discretion of the players.  I like to use all the decks I own.  Some people like to use certain decks.  Some people like to ensure a particular distribution of cards from each deck, but I find that tedious.  Here's how I set things up:


Set up the game board normally.  
Shuffle all Minor Improvements together from all decks.  
Remove all Occupations that carry a number greater than the number of players in the game (this number appears in a colored square and is either 1+, 3+ or 4+).  
Shuffle all remaining Occupations together from all decks.  
Randomly deal out 7 (or more) Occupations to each player.  
Randomly deal out 7 (or more) Minor Improvements to each player.  


(The next two steps are the drafting steps, which you can skip if you want to.)  


Each player chooses on Occupation and one Minor Improvement to keep, then passes the rest of their dealt cards to the person on their left/right.  
Repeat the previous step until all cards have been chosen.
If you chose to deal more than 7 Occs/Minors, each player discards until they have 7 each.  
Play the game.