If you do try feeder fish, I have found that rosey reds are less likely to carry disease than goldfish. Maybe its just at the pet store I go to, but they have worked well for me.
You can also keep feeder fish in a quarantine tank. If the fish live for more than a week then its likely that they are ok. But there still is a chance that they can be sick.
Rosey reds can be bred easily. I was looking on google and it says that the male ferilizes the eggs from several females at once. The specific article talked about there being a mass of compacted eggs 3 inches high. That definately means lots of fish! You might give it a try if your itnerested.
Last, never put the water from the plastic bag of feeder fish in your tank. Use a net to scoop out the fish. That will save you a lot of trouble.
Oscars will take pellets, but it fun to watch them hunt too. I mix up the food to the cichlids I have. How would you like to have Ramen noodles every day for dinner ;-)