What is the relationship between peace and happiness?   

Peace is in nivritti, the path of reduction of thoughtwaves Happiness is in pravritti, with thoughtwave Peace is a state of the mind which is completely contented. Happiness is also a state of mind which feels happy by fulfillment of desires. But never completely contented.

There are many disciplines that one could take on in life. How does one know that the disciplines one accepts are enough to move us forward on the path?

First we have to know what is needed for our self-development. Like a soldier knows about the aim of military discipline. Our ultimate aim is to be in peace, God, love. Whatever name you give it, it is still a state of peace. When we create an idea of peace, the next step is to find out what disturbs it. Desires, anger, hate, enmity, stealing - the unlimited list. We don't take then on one by one, but we make a discipline in life. "I will do this; I will not do this." That self-created discipline will live with you up to the end of life.

We all have karma and a drive to fulfill that karma. How do we distinguish between simply pursuing actions born of desire and pursuing those actions which are dharmic?

All actions are born of desires, whether worldly or spiritual. But when our aim of life is to attain peace, God, love, whatever name use, then worldly desires start diminishing and spiritual desire start coming up. Those actions which are lead by spiritual desire are called dharmic actions.

(From: Talks with Babaji (Baba Hari Dass),
©Pathways, Hanuman Fellowship Newsletter, Santa Cruz, Dec.2001/Jan 2002).