[Isowen]

I think saurons first mistake was not finding out about the hobbits and the shire. he saw them and thought they were capable of nothing, so he ignored them! even gandalf said "hobbits really are creatures, as I have said before. You can learn all there is to know about their ways in a month yet after a hundred years they can still surprise you at a pinch" Shadow of the past, page 61, Fellowship of the ring
So I would not have doubted the hobbits as it may be my downfall lol!
next, i would block up all entrances to Mordor and position uruk-hai or orc or even trolls there, leaving only the black gate.
Then, I should probably make more rings of power or maybe something to fall back on should the ring fail to get back to me!
I like boromir88's idea of blowing up mount doom! though i dont think sauron would like to destroy part of his own land. And as you also said, I would have used Saruman more! Like get him to make more orcs and uruk-hai and just go and destroy all peoples of middle earth who are unwilling to fight for him!