I have a 2006 Sportster 1200 and I really would like to know about the best primary oil? I am new owner and bought this bike a month ago. So any help is appreciative.

 

Maybe before doing anything drastic, you should drain the fuel and fill it with fresh premium. It kinda sounds like starter kick back from pre-ignition....or fuel that is firing too soon or burning too quickly. Just bad gas because its been sitting. This will also cause your "run-on" problem.
If it pops or sneezes just off idle at the first crack of the throttle, it may because of the excessively lean factory fuel setting....also contributing to the problem.

On the oil in the breather....nature of the beast. It may diminish over time as it really hasn't "broken in" yet.

 

On the starting problem, before you start tearing into high dollar starters etc. Pull the batter and have it bench tested and also check the ends of the leads attached to the starter and ground. If it's the original battery I would suspect it's bad. It can show charged, but still fail a load test due to sulfation.
FWIW; I was recently having the same issue with my 04 Sportster with a cheap 2 year old battery and a new battery solved the problem.

The oil is from the crank case ventilation system that vents it into the breather. Some bikes are worse than others, but there are various kits to vent the oil outside the carb.

 

The original post is 3 years old. Maybe his bike will have 680 miles on it by now?

 

Didn't even look at the date on the OP, just say the post from today.

 

Oops! I didn't look at the original date either.

So......never mind!