Yeah, it's my humble opinion that 1,000 points is really the good first benchmark, tho 500 can be done it's very limiting. Especially for certain armies (namely mine; Ogres) it can be very difficult to get into full swing with the game. But for a learning game, it might serve quite well. Besides, the higher point value you go in Fantasy, the bigger & badder heroes you get!
As far as army selection goes, i would definately recommend looking through the website (as slow and laggy as it is now) and check out the look of the models, the flavor of their backstory (as fantasy is far more mapped out than 40K), and imagine what you will derive the most enjoyment out of doing regularly to your opponents! lol I don't think i'll ever get tired of stomping over my enemies in a full on bull charge with great weapons! Or firing a gnoblar out of the scrap-launcher instead of the intended slew of pointy things! Or having a giant start jumping up and down on the little squishy things beneath it and not ever stop because he's having too much fun! Or... or... or.... yeah. You get the idea. Find your desired flavor then your fun factor will endlessly outweigh the 'dear me, another game' notion!