The idea behind C&C initative is that it doesn't really use any modifiers (no dexterity, no weapon speed, no casting time, etc) so you can do it either way. The default is written that you declare your action and then go with it. But there isn't anything keeping you from doing it the other way around. Roll initiative and as each turn comes up ask the player what he wants to do. The mechanic works the same either way, just depends how much freedom you want to give your players.
As to how you keep track of so many combatants at once that's when you'd use group initative (one roll for each group instead of each member). Do that for large battles and for smaller combats use individal initative. If you want be more "realistic" you can, of course, keep track of all three dozen at one time if you want, all up to you.
And if you want to use the 3e system it will fit in just fine without causing any problems.
Xp is pretty much as stated above. You get xp for killing monsters and for other optional events. We're a bit in the dark as to how optional those will be in the rules but, hey, it's your game so if you don't want to give story awards, individual awards, or awards for treasure just don't hand them out...no worries there either.
And I'm not a Troll so I can't say for sure but it's very much my impression that Monsters & Treasures will hit the shelves at the same time the Player's Book does. That's just my informed guess however, so take it as you please.
Regarding the 12/18 mechanic you could easily just make all target numbers what you want and give a player a +6 bonus when his prime comes into play. Nothing wrong with that. It's just not the way the Trolls went.
If you are trying to save against a fireball and your dexterity is prime your target number is 12 + caster's level + anything the CK adds (like a penalty for being stuck in a 5 foot cage while trying to duck and cover). If your dexterity is not prime then your target numder is 18 + the same as above. So a prime stat does easily translate into a +6 bonus no problem and you can do it that way without having to convert anything.
Edit: What C&C does to create more character flexibility is reduce rules. It's back to roleplaying basics. If you play the fighter right out of the book and take away all character development...yes, they will all be clones. But C&C is easy to modify by adding skill systems, feats, etc if you want them. But for those who don't want to add anything (which is fine, the game works great right out of the book) then you depend on each character being different because each player is different. C&C doesn't try to make characters different because one can swing a light sword faster or one can hit harder with a heavy sword. That's one way of course but C&C focuses on making your fighter different by boiling the rules down to something simple so YOU can make your fighter different. Some are going to like that and some aren't...for those who don't then you either add something in (and this is VERY easy) or perhaps the game isn't for you.
