Make sure you sign up with Google Analytics and spend some time figuring everything out there, as the tools integrate with AdWords and will help you to fine-tune your approach.
Also, look at your existing stats: are there targeted keyphrases that you are not showing up on, or showing poorly on? They may be the best phrases to start with. If you're already on the first page, you may not want to spend any money on those terms.
Another tip: #1 isn't always the best spot
