Your BFLs will run great on p2pool, or you could just use p2pool as a backup for them.
I see higher amount of rejects on p2pool with BFL devices using cgminer compared to other pools. Is that normal? or am I missing some configuration?
A bit higher than other pools is normal. Non-rejects are worth slightly more on P2Pool to compensate. What reject rate are you getting? The average for the entire P2Pool is 7%, so if you're close to that you're not losing anything. If you're lower you're actually making more than expected.
I see about 5.1% to 5.5% now. How is it that I am making more compared to a pool with 1% fee but very low rejects? Because on a normal pool I get 0.3% rejects only? Wouldnt that mean I would make 4% more on a normal pool?