A mofif in the book is that if people were given the choice to be happy, but not free or free, but not happy, would they choose the former?

This is an interesting question.  I think that Orwell
concludes two different points on this.  On one hand, there is what Orwell would like to
see in humanity, but there is also what Orwell does see in humanity.  I sense a definite
tension between what is and what should be in Orwell's work.  I do see Orwell as hoping
that individuals possess freedom no matter what, and if happiness is elusive, one can
chalk it up to individual freedom.  That fact that Winston never is able to experience
freedom, in its purest of senses, because of Big Brother and the configuration of
Oceania is testament to this.  Orwell would argue that the government of Oceania is
quite content when individuals are "happy" and willing to sacrifice their freedom as it
substantiates the state and emboldens the government.  This is why Orwell would probably
wish humans to have freedom and strive for happiness, for in this condition, the state
does not possess all encompassing power.  At the time of writing, Orwell believed that
neither superpower was really willing to be happy with freedom of the individual and
that both sought to control the individual and the freedom within he/ she.  In the end,
it is this condition, suggesting that one validates freedom over happiness that Orwell
might like to see in the individual as it decreases the power from the
state.