Joomla installation is
/home/account_name/public_html/Joomla+JMS

1) What is the recommended path for slave sites
Is it
/home/account_name/public_html/Joomla+JMS/slave_sites
or
/home/account_name/slave_sites

2)Also for slave sites, do we have to copy or "symbolic link" of .htaccess and robots.txt from master site?

1) For the recommendation, see presentation that we did at several Joomla day and for example
jms2win.com/en/documentation/doc_details...-day-strasbourg-2012

See page 16
naming convention is

domains/YOURDOMAIN/public_html
domains/YOURDOMAIN/subdomains/SUBDOMAIN/public_html

2) You can have a link or a copy of the htaccess / robots depending if you want to have common (shared) content or specific one.

How do you change from a shared htaccess file to a specific one for each site? I have a new slave site I just imported which used to have the site files in a "site" subdirectory (www.mydomain.com/site) but in JMS it will not have "site" in the URL. So I want to create a rewrite rule to redirect all requests for www.mydomain.com/site to www.mydomain.com

NO, when you share the .htaccess we don't change it.
The only case where the .htaccess can be modified is when you select the "Rewrite base according the domain" inside the JMS Template rule (file/folder tabs).
Otherwise, JMS doesn't touch it.

If you want to create website like mydomain.com/site, you have JMS template rule that propose such kind of settings.
You can also use the JMS template "alias" to setup a link between the subdirectory and something else. It is not required to modify the .htaccess to do that.

This is the rule "xxxSubdir" that you have in the JMS templates.