I'd be surprised if Faz had applied - he's been a coach for over 25 years without being a manager, so why start now? I'd guess the internal candidate was either Chris Allen or Andy Whing. I've no idea which of the two is more ambitious and/or impressive enough to have been shortlisted though.
Judging by the bookies odds fluctuations around the time of interviews I'd guess the shortlist was:
Clotet is obviously a risk - his previous stints as a number 1 have not gone well, but as others have commented the same was true of Appleton, and he worked out alright. Given that we look like continuing with the same coaching/back room team, then it looks like Pep's ability to recruit the right players will be crucial. It will be interesting to see what kind of player we're going for now.
I'm very pleased we didn't go with Lampard, Latin GCSE notwithstanding. I'm not sure that being a star player at some of the richest clubs in the world is the best preparation for League One management. Sure he had to work hard to get there, but I'd like to have seen a little more dedication to getting coaching experience before taking a punt on someone like him. And OUFC is a whole world away from Chelsea and Man City - the only places he's had any real football exposure in the last 16 years.