Be truthful, be sure to have proof of your impending immigration to Canada.
- Do I still qualify for the ESTA? Someone on another forum says that one of the conditions is that you have to leave NORTH America within 90 days and not just the US - but I can't find anything to back this up.
You should be fine. You don't have to leave north america but the 90 day clock doesn't reset if you don't (so you couldnt come back to the US until you did). This rule doesn't apply if you return to your country of residence so once you're a resident of Canada you're good.
- Assuming that I do qualify for the ESTA - when asked if I'm transiting through the US, do I select yes?
No, you're vacation in the US and happen to be moving to Canada after.