For the multiple upload workflow, I prefer option 1 (creating a default title + sequential number for each image, and allowing the user to edit the description/add categories after upload).

I'm still wondering whether there's any real merit in making the user enter a custom title and a description, though. There's more thinking and room for error involved on the user's part (if they pick a filename that's taken, they won't be able to upload), and in practice most titles and descriptions are identical. I know this is a legacy workflow from desktop uploading, but I still think we should shake things up a bit and push for less work on the user's part/more streamlined metadata :)