Easy songs to freestyle? Just look for songs with simple steps that flow naturally, and/or are easy to remember (since you likely won't be facing the screen the whole time). Some of my favorites are AM-3P, Let's Groove, Mobo Moga, and Super Star. But really, any song that you're familiar enough with to do mostly from memory will probably work. Also, remember that when freestyling, it's ok to do songs on easier difficulties, so be sure to experiment with various songs to try to find ones with fun step patterns. And if you're feeling extra adventurous, there's always doubles mode...
Moves to avoid? Well, first and foremost, avoid moves that could result in you being injured unless you're really really good at them. Doing a back flip in the middle of a song might be cool, but not if you land on your head
Also, never... NEVER Matrix walk on the machine. That's probably the single most frowned upon move in DDR society. If you aren't familiar with what Matrix walking is, it's when you hold onto the bar with one hand, and then kick your feet up against the screen, and walk across. It might look cool, but first of all, it's been way over done. And secondly, and more importantly, it can permanently damage the machine, so don't do it unless you're willing to pay for possible repairs. A few other moves you may want to avoid: slapping panels with your hands, or doing knee drops on the pad. They're ok moves in moderation, but they're fairly simple, and therefore overdone. You can do them, just make sure you have something more substantial in your routine. Spins are also a bit overdone, so make sure to at least add a little style to any spins you make.
Generally, the best routines (at least in this DDR freak's opinion) are ones that incorporate real dance moves into them. Basically, coreagraphing a full dance routine to the music, and managing to hit most of the arrows while you're at it. What impresses me most is when a freestyler faces the audience during the entire (or almost entire) song, but I don't expect everyone to be able to do that. If you have the dedication, though, I can guarantee it would win you major bonus points with the judges.