We chose an S-corp for the liability protection and for the tax benefits. With an S-designation from the IRS, all of the income passes through to the shareholders without being taxed at the corporate level, meaning you claim your portion of the corporation's income as your personal income and pay taxes on it then. You can have up to 25 shareholders in an S-corp before you have to become a C-corp.
By all means do not do a sole proprietorship. You will have no legal protections from someone going after your house and assets if something happens to the business.