Hi Sarah,
I'm a type 1, but in some ways that helps as I'm using insulin as well. I know that my levels don't change overnight (well, as long as I've not eaten or done insulin in the 5hrs or so before bed), so I aim for 5-6 & then wake up within 1.5mmol/L higher or lower. I don't think you should be aiming for 8-10 before bed unless your levels drop overnight.
Have you done a test of your long acting insulin effect overnight? You need to start it 5-6 hours after your last food & fast acting insulin, test, then set your alarm to wake you every 2-4hrs overnight & test again. Then you can see if your BG is steadily, rising, steadily falling, or falling & then shooting up with the Dawn Phenomenon (usually from about 4-5am).
Most people find their BG rises a couple of hours before waking & again in the hour after waking, and here's not much you can do about that, but if you can see that your BG doesn't drop into hypo if you start at 6-7 overnight, then you know you're on the right track.
I've no idea about milk - in what way do you mean better? Taste, effect on BG or effect on weight? I don't think I've noticed any difference in effect on BG, suppose it depends how much you use.