Woodies to Empire, eh? Welcome to the kinda-winning side!
1) Mix up the way you paint your colours. I'm not sure I can describe it here, but I divided my State Troops into 4 bits- left arm, right arm, left leg, right leg. My two colours were dark (ish) red and grey. For some I painted the left leg and right leg grey, with the arms grey, while for others I painted the right arm and left leg red, with the left arm and right leg grey. I hope that explained it well enough. What that style does is gives them a regimental look, with an element of uniqueness as well. For the banner, I had half red, half grey, with a Push Play removable tattoo on the banner. It looks original, shall we say, and it's picked up a few laughs as well.
To pick your colours, decide on some fluff, do you want tough Northerners or high-tech Southerners? Decide if you want to theme your army around a pre-existing scheme that you like and copy it or use 2 colours that you like.
2) 20-25 is best. You can have Detachments to complement the big unit, so the need for numbers isn't that great. I find that I beat units by denying them CR, as well as a few easy bonuses. Detachments do that well. My 17 Spearmen with a full command are capable of taking on bigger Orc and Night Gobbo units and come out better off, now that I have my beloved Militia (Free Company). 20 should do fine, but if you want a buffer that doesn't die easily, then 25 will serve you well.
3) Depends on how much money you have. I got the Battle of Blackfire Pass (6th Ed), with a Cannon, 16 Handgunners, 16 Spearmen, and a Captain. That's enough to start a decent force, and play a few games.
If you only have a little bit (like my situation all too often), get a regiment boxed set or two, and a character. I'd get the State Troops (Spearmen, Swordsmen or Halberdiers) or Militia (X-Bows, Bows or Free Company), and the ranged State Troops set, or any two of the above. In addition to that, I'd get the extra col Empire general that I only don't have because no stores around the place have him, and the store owners have no idea who I'm talking about so they can't order him grumblegrumblegrumble. Don't necessarily get them all at once.
Actually, if you get the Militia set, you can make 10 X-bowmen and 10 Free Company. Bam, you now have 2 Core choices. Adding the Empire general will get you 2 characters, all for $90NZD. Excellent.
If you have loads of money, get the battalion Set, or Reinforcement Set. They often come with a fully legal force, and you'll save quite a lot of money.
Once you have a few units, play some games, then decide what you need. My first games saw me get hammered by his O&G Magic, and his units were too big. Thus, I decided I needed some heavy hitters (which eventually led me to get Knights- eventually :C), and a couple of Wizards. Now my Empire force is close to 3K points, and has gone from losign almost every game to being very hard to beat.
Cheers to you if you read that, hope it helps.
-AFG