Past tense: I was happy. (This means that in the past, you were happy.) "If I was happy when I was young, then why didn't I smile?" (This is still about the past.) Subjunctive mood (to say something that you know isn't really true, or is probably not true): "If I were rich, then I'd be happy." (This is about the present.) "If she were pretty, then I'd kiss her." (This is about the present.) These mean that I know that I'm NOT rich, and that she ISN'T pretty. NOTE: Lots of native English speakers use "was" in every case! They would say: "If I was rich, then I'd be happy." So don't worry too much, because many English speakers don't even notice.

"If I were" can only be used if the situation is contrary to fact, or at least, pretty unlikely (it's a so-called past subjunctive). "If I was" is used otherwise. Thus you might say "If I were rich, I'd buy a Ferrari", but "If I was too loud last night, then I'm sorry". It's becoming increasingly common to use "was" even in the first case, as the past subjunctive is pretty well indistinguishable from the indicative, except for 1st and 3rd person singular of a single verb, viz. "be", so the distinction is pretty useless.

Both are correct. In conditional sentences, when you need to use a past tense form in order to express an unreal situation, if the subject is "I" and the verb is "to be" then you would use "I was", however using "I were" in these unreal situations is also correct (some grammarians would even argue that it is more correct to use "I were", but both forms are used). Real situation: I was happy yesterday. Unreal situation: I would be play all day if I was/were a dog.

Very few people say "If I were" in daily life, even when it is the correct choice. Most English speakers do not know the reason for this (the subjunctive is something I only learned in high school when learning foreign languages. So unless you are worried about an exam, forget "if I were"! Good luck, and congratulations on reaching this level with your English. It is a HORRIBLY INCONSISTENT language, coming from so many roots and affected by so many invasions, so I'm glad I was brought up speaking it. :-)