It depends on your goals, as vjek indicates.
Dead civs (the ones recognized by DF as such) are broken in many ways, so I've given up on playing them:
- They can't travel at all (conquest, messenger, etc.), as they'll leave the embark and never progress from there.
- Loss of the expedition leader is crippling, as it's never replaced, so everything that depends on the presence of an expedition leader can no longer be done (when the pop has increased to the level at which you get mayors, that problem goes away).
Dead civ means no dwarven trade, but you can just refuse to trade with them, if you want to emulate that (although you'll probably get a pile of junk every once in a while from scuttling traders when they get attacked by something or other).
Your civ status does not affect trading with other civs. However, the default raws are set up such that you can't trade with humans unless you've previously traded sufficiently with others, so if your civ is dead and there are no pointy-ears nearby, you can't trade with the humies either, but you can change the entity raws to work around that (can be done on an existing save, as the setup is probably made to avoid humies showing up during the first summer).
The default attack triggers mean that it will take a very long time for any (non necro) sieges or (semi)megabeast attacks to happen. I'd suggest lowering the triggers.
I find the default of 1 anvil, two picks, and two axes to be good. I give one axe to a wood cutter and the other to my single "militia" member (for cases where I need to attack something, like e.g. some shell bearing surface critter). I don't care about skills as everything of importance can be trained. I bring all kinds of surface plants on embark to start out surface farming, but that's just my preference.
One thing you do want to check on embark is that you've got at least 2, and preferably 3, viable future couples, i.e. a gender division no more skewed that 2/5 and check their sexual orientation and marriage willingness plus marriage avoiding traits on those (Dwarf Therapist can be used for this). Age difference is less of an issue nowadays when it's no longer a strict 10 years, but it's rather boring to have to wait for 20 years before they come within range. If the couples don't form up, skip out of embark and try again, which will roll new dorfs.
Also note that visitors can arrive, if the world allows for them, regardless of your civ status. This means that you may have opportunity to recruit additional citizens that way (which you may not want to do), and it also means a huge stream of villains once you start producing artifacts (pop 20 required to get any moods).