Second question is easy.
1. Horse
2. Weapon, preferably at least one blunt.
3. Looters.
Spend whatever you have on that horse. Also, take missions of delivering messages, those 30 denars each build up when you have nothing. The reason I said blunt weapon is so you can capture the looters. Again, 50 denars each is useful to getting yourself back on your feet.
Finally, hire the free NPC characters (Marnid, Jermus, Firentis, Ymira, Deshavi). Firentis is particularly good as he is the best fighter, and also has a sword you can pinch if you really need one.
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As for Khergits, horsemen is the way, for both avoiding and in battle. Forget archers and infantry, go straight the way to Vaegir Horsemen/Knights. You might want to avoid upgrading some to Knight, actually, as Horsemen are faster, and have that all important shield to block arrows. You have the advantage here that Vaegir Veterans are semi-horsmen, which Swadian infantry are not.
This army will be both fast and effective against Khergits. Also, get your pathfinding skills up as high as possible, and try and keep morale high. Also, when you have just acquired a fair bit of loot, deposit it at a city before returning to Khergitland.
A general hint for avoiding enemy armies which are faster, is to enter a friendly castle or town, and select 'Stay here for some time.' Then wait until the offending army has pissed off, and come out. If is daylight, you will not even have to pay for your stay there. I use this trick all the time.
For battle, at the start, press F1 to order your army to halt, wait a few seconds (Literally - just a few). Then press F3 to charge. Basically, it is then a do or die game of chase. Your own participation is vital. If you have a lance (And believe me, you want one in this situation), try and get some decent couched damage lined up, it will be instrumental to victory. I presume yu know how to deliver it?
Finally, pinning the Khergit cavalry against the edge of the map is a cheap tactic, but effective in getting them where you want them. Just be wary of arrows while you are stopped stlll.
Edit: Stormcloud, i is so much teh betta thn u