Do we need to cheat the mind to escape thoughts which would lead to bad habits? Do we need to cheat the mind?

For example:


A thought came: "Why not get Drunk tonight?" (I don't drink &amp; smoke)
Next Thought: "No I am not supposed to do it" (is this 'mind' talking again?)
Next Thought: "Oh Come on, Don't be a child."
Next Thought: "No my room mates are good people, I can not."


When I think about it, I came to know that my friends are also a major fact in helping me in making good habits.

But what if someday I am with some guys, who are always drinking, and there is no pressure of insult?

How to control mind?

Is observing the feeling of lust actually helping me to know more about it?

Is it true that we can never control the mind, and that we just have to cheat it by either focusing on some other thing (which is just to avoid the feeling, but it will come back), or to observe it? What exactly happens when I observe a feeling or sensation in the body?

What is the best way to change a bad habit? Someone told me to know the reason why I want to change it, but would that be enough?
But what if someday I am with some guys, who are always drinking, and there is no pressure of insult?

I agree that friends (the company you keep) are important.

I think that doctrine is found in several suttas:


Upaddha Sutta:


  And through this line of reasoning one may know how admirable friendship, admirable companionship, admirable camaraderie is actually the whole of the holy life

Bhikkhuni Sutta


  'This body comes into being through conceit. And yet it is by relying on conceit that conceit is to be abandoned.' Thus was it said. And in reference to what was it said? There is the case, sister, where a monk hears, 'The monk named such-and-such, they say, through the ending of the fermentations, has entered &amp; remains in the fermentation-free awareness-release &amp; discernment-release, having known &amp; realized them for himself in the here &amp; now.' The thought occurs to him, 'The monk named such-and-such, they say, through the ending of the fermentations, has entered &amp; remains in the fermentation-free awareness-release &amp; discernment-release, having known &amp; realized them for himself in the here &amp; now. Then why not me?' Then he eventually abandons conceit, having relied on conceit. 'This body comes into being through conceit. And yet it is by relying on conceit that conceit is to be abandoned.' Thus was it said, and in reference to this was it said.

Sigalovada Sutta  (read the whole sutta, not only this quote):


  Young man, be aware of these four enemies disguised as friends: the taker, the talker, the flatterer, and the reckless companion.

Dhammapada;


  
  If one finds a sagacious friend, who is a virtuous and steadfast companion, one should live with him joyfully and mindfully, overcoming all dangers.
  If one cannot find a sagacious friend, who is a virtuous and steadfast companion, one should live alone like the king who gave up and left the country he had won, and like the elephant Matanga roaming alone in the forest.
  It is better to live alone; there is no fellowship with a fool. So one should live alone, do no evil, and be carefree like the elephant Matanga roaming alone in the forest.
  



Is observing the feeling of lust actually helping me to know more about it?

If I tell you to jump off a tall building I think there are two things you could do:


Jump off the building, because I told you to, without thinking about it
Hear the sound of my words but without obeying them (without making them your intentional action)


I think that "observation" is a bit like the second scenario -- it helps you to detach from the impulse ... and/or to experience the sensation (the sound or thought) without that forming much impulse to act.

What is the best way to change a bad habit? Someone told me to know the reason why I want to change it, but would that be enough?

Various ways include:


Avoid the bad habit in the first place. For example if you've reason to believe that smoking is harmful and addictive, don't start smoking (never try smoking) -- if you do you might say, afterwards, "Well once was OK (I survived it), it was new, interesting ... maybe try it again now!"
If you acquire a bad habit, try to stop it as soon as possible. Allowing yourself to continue to practice the bad habit for longer doesn't make it easier to stop!
Change your situation (e.g. avoid living with harmful people)
Understand the harm and the unsatisfying nature of the bad habit -- sometimes it's a habit because it's not satisfying (because "doing it once isn't satisfying" is the reason why you're tempted to do it again)
Consider or search for wholesome alternatives (e.g. if a bad habit is a choice, an option, there may be other other choices, better options)
Beware the "I am special" temptation, i.e. conceit: for example, thinking "drinking is harmful for other people ... but it's OK for me!" -- or the opposite, e.g. "may everyone else be happy ... but I just want to drink myself to death!".
Consider the future: "If I continue to do this, what is the likely consequence?"
Confess (admit) the fault.


For example, in the Vinaya (the monks' rules), many transgressions are labelled "faults of confession". I don't know details but I think that if a monk transgresses they're supposed to confess that (to another monk), "I did such-and-such", and that there are reasons why that's prescribed.
Another example, from secular life, people who are habitual alcoholics might go to a meeting for alcoholics, to discuss and share experiences about what the various problems are, and maybe how and what it's like to overcome them. You can't really do that unless you're willing to say, "Alcoholism is a problem (is one of my problems) and it would be appropriate for me to attend these meetings".
If you don't want to admit you have a problem then avoid committing problematic actions -- that's one of the ways in which social pressure or peer pressure might help you to stay out of trouble. Conversely if you do have a problem then admit it.





Also FYI the thought "Oh Come on, Don't be a child" sounds to me like it has some implicit/unstated assumptions or views: for example that, "Being a child is bad", and that, "Adults drink alcohol". Beware these implicit assumptions or arguments (and others) are not necessarily true -- it may be quite a common line of "reasoning" (argument) among teenagers or young adults, though.



Is there a difference between ego and conceit?

I think that English isn't the "native language" of Buddhist Dharma, and "conceit" is an English translation.

For longer explanations of what the word "conceit" means, see for example the answers to this question, How are 'conceit' and 'identity-view' not the same?



and does Bhikkhuni Sutta's Essence means to abandon conceit

I think that conceit includes comparing yourself to others, for example the following are both called forms of conceit:


"I am better than he is"
"He is better than I am"


I think the essence of the Bhikkhuni Sutta is that although conceit is to be abandoned finally, it can be a useful tool, a useful stage on the path.

For example the following is conceit:


"That monk was able to achieve a stage of enlightened. If he could do it then so can I: and if I do what he does then I too will reach that stage!"


That's conceit because it's comparing yourself; but it's useful because it gives you confidence or faith, and gives you a good example (and doesn't give you a bad example).



I also do not understand the impulse thing (Does impulse means the action one takes after sensation)

I'm not sure I do either.

See for example this page:


  Intention, I tell you, is kamma. Intending, one does kamma by way of body, speech, &amp; intellect.
  
  And what is the cause by which kamma comes into play? Contact is the cause by which kamma comes into play.


I think that two examples of that are:


I see an apple. The thought occurs, "Supposing I were to eat the apple?" I decide (or accept the impulse) to eat it.
I look over the edge of a tall building. The thought occurs, "Supposing I were to jump off this building?" I decide not to (or refuse or ignore the impulse) to jump.


When the sutta says "Contact is the cause" perhaps that means for example "Seeing the apple" and "Being aware of the thought".

The "intentional action" is when I eat the apple and do so intentionally (knowing that it's an apple, having decided to eat it for some good or bad reason).



Many people say by smoking they are not harming anyone, so they do not have reason to quit, (even spiritual people say that)

I have observed there are people who say that, yes.



What I need to understand of this?

I think that these are people who are less likely to change that habit: because they say it isn't harmful.