"Should the thumb movement be down (towards the floor), or out (away from the banjo head) when plucking the string?"

Depends which works for you. I tend to go down then out (there's a bad joke in here, but I'm not willing to go there at the moment) if I'm doing more of a note-thumb-brush Seeger-type strum; but more out if I'm doing a finger-thumb-finger-thumb sequence (in tab, m-t-b vs. m-t-m-t).