I'm embarrassed to ask this, but with regards to initiative...

I have only played a few times vs. my brother and we always squad build to 100 points on the nose. I am always imperial. I know I move first with lowest PS ships to highest in the activation phase. Next he moves his rebel ships from lowest to highest. Correct?

Next phase: Combat. This is where I think we screwed up. I was under the impression that the rebellion shot first from highest to lowest PS, then my imperials followed suit. I just realized that it looks like the imperials also should go first in the Combat phase (given 100 point even squad builds). Is this correct? If so, how the heck did I miss that?

Off on a number of points.

During the activation phase, ships activate from low to high PS. If both players have ships with the same PS, the player with initiative moves his first. If a player has multiple ships with the same PS, he chooses the order to move them.

During the combat phase it's pretty much the same, just from high to low. Start at the highest PS, work your way down. Same PS means the player with initiative goes first.

So, always by PS first, initiative goes first on ties,.

Not quite. Ships move and attack in ascending or descending order regardless of which side they're on. So all Pilot Skill 1 ships move and perform actions, then all Pilot Skill 2 ships, and so on. In the combat phase, the ships with the highest skill level shoot first, then the next highest, and so on. The side they're on doesn't matter, unless you have ships from different side with the same skill level. In that case, the side with initiative moves and/or shoots first.

Got it! Thanks!

Initiative only matters when there is a "tie" otherwise move/shoot order is determined solely on pilot skill.