Door #3.
I have no clue

Firstly, stay away from blitz. Playing fast will only compound your problems if you don't understand what you are doing. Instead try to play half hour games/15|10 - and spend the time to think what you want to accomplish with each move you play. This will really help. Secondly, get a decent book on the game of chess - try 'The right way to play chess' by Pritchard. It will give you some good grounding on the very basics of chess, which at the level your playing will serve you much better than an opening theory book which is likely to confuse you with moves that you don't understand the point of and will likely just put you off learning anything. You main objectives then should be to 1) get your pieces developed, I.e. off the back rank, 2) get castled and 3) don't give away free pieces. If you can achieve that you'll be on the way to improving no end.

Play over your completed games to see where you went wrong and how you could have improved the position. Analyse all the options you could play before moving, and try to find your opponents best move so you can counter it.

Before each move (especially the obvious ones!), run the move through this quick mental checklist:
1. What can my opponent capture after I move here?
2. What checks would this move make available to my opponent?
3. What threats or counterplay is available to my opponent after I make this move?
Do this for each move and you will see that you make fewer blunders per game than before.
As a result, you can expect your rating to climb a couple hundred points due to your consistent 'blunder check' system.
Analyze your losses.
If you do happen to drop a piece even after using the checklist designed to eliminate blunders from your play, when you analyze your game, decide what would have been a better move to prevent the blunder so that you don't get burned by the same mistake in any of your games from now on.
This should help you.
If it doesn't increase your rating by at least a hundred points, I will give you 100% of your money back...no questions asked!
I got my raiting up to 800, low I know but i have only just started taking chess seriously. I have worked through "bobby fischers teaches chess" and have learn't opening principles and I do tactics training, but now my raiting has dropped tp 675 and I loose games against people who I should win against.
How should proceed:
books
dvd
play more
play blitz
analyse games - if so, how