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This is from the wiki:
Selling vegetables at Corpselight Farm.
Delivering ashes to the Hall of the Dead for Thadgeir (Dengeir's house).
Retrieving Runil's journal from a radiant location.
Selling firewood at Half-Moon Mill.
Investing in a store.
Stealing a private letter from Lod for Dengeir.
Go to the blue palace and talk to the court wizard Sybille Stentor, you will get this conversation:
Dragonborn: Were you there when high king Torygg died?
Sybille: I was, to my shame. the whole court was in attendance. I've seen much in my time, but that was a gruesome day.
Dragonborn: How...
I would shouting someone against the floor and stabbing him in the chest while he can't defend himself hardly call a duel. Talking to some people in the blue palace gives you a lot of information about what happened.
It's just a role-playing thing, there is no way to join them in the game itself. Some people think there will be a DLC about it but, that's just rumors and guesses.
The best is elven, it is the lightest and after you reach the armor cap (around 260 I think) it doesn't reduce the damage any more. (For example: an armor rating of 300 is just as good as a rating of 500)
Somewhere in the north-west at the shore of the lake in Falkreath hold there is a small hunters camp with a tent, a boat, some salmon and a skillbook. You could use that as your base.
For jedi you could go for a Glass (great)sword as a blue lightsaber and for robes you could either use the novice robes/hood in Helgen keep or you could go to radiant raiment in solitude and get some robe there. (if you boost your enchanting skill you might be able to add a health enchantment as...
Argonians, 1. The looks
2. Histskin ability (faster health regeneration for 60 seconds once a day)
3. breathing under water, I don't use it a lot but it can be pretty useful.