It is most likely going to be a 3 player game. I think I understand how everything should work but I would like some confirmation on moving units.

Initially reading through the rules I got the impression that the General is in charge of ground units and the Admiral is in charge of ships, but that must only apply to to combat. Units are moved by leaders so weather it is a Admiral leader or a General leader any unit can be moved by the person controlling that leader.

This is particularly interesting when it comes to retreating. The rules state, "Any player can choose to retreat, as long as he uses his own leader. Each team can only retreat once per combat." So regardless of who initiates the retreat it is treated as a standard retreat i.e. all ships are moved out of the system. In other words the General does not and cannot just retreat ground units.

In theory the General could choose to retreat, move his leader and all the ships out of the system and then finish up more rounds of combat with the ground units that he left in the system.

Am I correct in all of this? Has anyone played a 3+ person game and discovered something that they didn't realize reading the rules?

Finally I am wondering about action cards in the first game. The learn to play book says to only use them for recruiting and ignore the card effects, but they don't really seem that complicated. Do you think it would be a bad idea to use them per normal rules in the first game?

They are not complicated. Use them.

Yeah, I'd definitely recommend using the action cards- they do make the game a lot more fun. Most important rule to remember with them is that they always need to be used in the system where their associated leader is.

I would recommend using the vanilla setup for systems, though. It's a fine starting place, and saves you the headache of making decisions whose ramifications you're not in a position to understand.