| We use a whiteboard with 1 inch squares. It has served us well and with colored markers makes it easy to see where there is water or fire for example. Although, I do like the idea of the large gridded pad for pre-drawing intricate locals.
I try to draw only what the players can see and when they can see it. An excellent example of this is they walked into a large room with a dragon in the center. No one looked around and for a change, the DM's plan worked. There were 4 alcoves on the wall where they walked in that no one saw until the guards walked out mid first round and everyone was out of position.
As for mini's, I had a bunch of the old lead ones, so each party member chose their own and uses it every session. For monsters, I use dice. It works well since I can group the dice based on monster group(all the orcs are D6s, the goblin archers, d8, etc). What is really nice is we take the time to make sure they all have a unique number facing up. It makes targeting them and keeping track of their hit points so much easier.
For initiative, each player has a small post it with their name on it. We put them in init order, along with dice(for the monsters) down the side of the board. Works great. Someone usually moves something down the order so everyone knows who is coming up next.
But like everyone said, have fun. Improvise. If you ask my players, one of the most memorable experiences was something I improvised. They were fighting a black dragon in the top of a tower. The party attempted to draw him into the hallway where the terrain was much better for them. So they all flee out there and ready an action for when he comes through the door. Instead I tell them it sounds like he is flying away. Then he crashed through the ceiling on top of 3 of them. Never planned it, cheated in that he crashed through where it would impact them the most, and they never saw it coming. | 
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