I went with the first option. Got some errors after running ./configure.
Installed ncurses, sudo apt-get install ncurses-dev, compiled it again. It worked, compiled version successfully runs.
Although I get this little error:
Error detected while processing ~/.vimrc:
line 14:
E484: Can't open file /usr/local/share/vim/syntax/syntax.vim
Press ENTER or type command to continue
Platform is ubuntu9.10