Harry Potter Questions

A couple of speculative AU-ish questions for the HP peeps here.

1) I've seen it said that one reason that Harry was left (and kept) with the Dursleys was to keep him out of the hands of the Malfoys. I can't remember how much support this idea had in canon, but it seems plausible anyway. I've read quite a few stories where Harry being adopted by the Malfoys is seen as almost a fate worse than death - but has anyone written a story where this fate did happen, where Harry was adopted by the Malfoys? Has anyone written a good story with that scenario?

2) I'm rather stuck with one of my AU HP stories because I can't actually decide what is the best outcome for Harry in the scenario I've set up. The situation in the story is that the Dursleys have been persuaded that they need to at least give the outward appearance of not neglecting Harry, because of What The Neighbours Might Think. Harry is about eight or nine at the time; they give him Dudley's second bedroom, second-hand furniture, his own (but second-hand) clothes... as I said, the outward appearance. So Harry is better off than in canon, though obviously the Dursleys still hate and fear magic. And I can't decide what to aim for.

The options, as I can see them:

A) Leave things as they are; Harry at the Dursleys. After all he's better off than in canon. And if the Dursleys are less obvious in their neglect, it would be harder to remove Harry from their custody anyway.
B) The Dursleys are still caught out as neglecting Harry, and he is removed from their custody. And Harry is adopted.

i) Adopted by Aunt Marge (who is the one who noticed Harry's neglect)
ii) Adopted by the Tonks family (who are cousins through the Blacks)
iii) Adopted by the Malfoys (who are cousins through the Blacks)
iv) Adopted by the Weasleys.
v) Adopted by Snape.
vi) Adopted by someone else entirely.

But I'm finding it hard to make any of these particularly plausible in my mind.

I CAN'T DECIDE! HELP!