I would just add that tax classification and the liability protection entity are two different things. You can form an LLC and elect to be taxed as a C Corp. The upside is most states have fewer admin requirements for LLCs (e.g. you don't have to keep minutes, name officers, etc.)
As for Delaware vs. your home state (CA in this case), I think it depends on the business. If you are a multi-national corp, sure go with Delaware. But if you live in CA, the other owners live in CA, and you're mostly doing business in CA, I'm not sure you'd need a Delaware corp. Delaware has franchise taxes of its own, so you'll end up paying taxes and fees in two states because you'll have to register as a foreign corp in your home state (CA).
As for Delaware vs. your home state (CA in this case), I think it depends on the business. If you are a multi-national corp, sure go with Delaware. But if you live in CA, the other owners live in CA, and you're mostly doing business in CA, I'm not sure you'd need a Delaware corp. Delaware has franchise taxes of its own, so you'll end up paying taxes and fees in two states because you'll have to register as a foreign corp in your home state (CA).