Here's something to help out
https://www.moddb.com/mods/randomguy7s-fix-compilation

Does this contain the unofficial 1.65 patch?
Also, can you use Powermad with this installed?

No, doesn't include the 1.65 patch but PK++, which was a earlier "community patch" I think. Even though it mostly modified MP stuff so yeah... Nothing like 1.65. And no, it is not compatible with Powermad or 1.65. You would have to merge all the lua scripts and make them compatible and this is a pain in the ass. I talk from experience. Did some work on Painkiller merged compilations but once it got too complex, it gets a real pain in the ass, especially if you just have average coding skills.

What's the best option out of these two patches?

I would go with unofficial 1.65 patch. I tried randomguy7's fix compilation and everytime I would load a save my game would crash. I am going to reinstall PK later and go back to using the 1.65 patch. No, actually I am going to use the "Ultimate Painkiller Community Patch Merge RC3 by LucYfer". Found it on a Steam Guide and that's how I played. I used that for the Steam version and it plays just fine. I recently bought PK Black Edition on GOG just because I enjoy the game so much (plus GOG has goodies alongside the game).
I would recommend the patch I stated above, but if I had to choose between unofficial 1.65 patch or randomguy7's fix compilation, I would choose the unofficial 1.65 patch.