When installing a toilet in a bathroom with hardwood floors, should I put a bead of silicone or caulk around the base to finish things up? Is this necessary, or is it merely aesthetics? I have heard that I should put silicone down, but not caulk. I'm not sure if this is true or not, or how it's determined.
I think you're confusing the terms "caulk" and "silicone" for the colors "white" and "clear". A lot of caulks are made from silicone rubber, and they can be white or clear (or other colors).
To answer your question, I would use a clear caulk around the base of the toilet as it will look better next to the wood. I've always used caulk because it prevents any, uh, splashes, from running under the toilet where they'd be hard to clean up. Leave a small gap at the back of the toilet so that if you do have leaks, they'll have somewhere to drain to and you'll be able to tell.
No you never silicone a toilet to the floor. If you do and have a leak, you won't be able too tell until it's too late. Then if you do have a leak and can't tell, there goes your floor.
You should use sanitary silicone I think.