Before I start on character creation, a couple of points need to be made. Make sure to try out the tutorial in the main menu. Seems like a really obvious thing to do, but it needs to be said. Second, this is a beginners guide, so as you're a beginner turn the difficulty down to it's easiest possible level (generally about 33% - 38%) in the options menu by changing the various options, such as the amount of damage you and your troops take and the size of the battles. You should increase the battle size as your army becomes more and more experienced, if only because riding into battle with 49 knights is an incredible feeling.

When you create your character, you'll have to answer questions about the past you had before you entered the world of Calradia. You can find a detailed list of all the effects the answers have at mountandblade.wikia.com/wiki/Character_Creation but these will mean nothing unless you've already played the game. So my advice is to start with a character who has high Strength and Charisma. I've found these are going to be your most useful stats once you're in the game, since they affect your ability to fight and how many soldiers you can command. Intelligence is the next most useful, followed by Agility.

So, in my personal opinion, the easiest way for a beginner to start playing M+B is take these answers:

Gender: Male (this gives you +1 Strength and Charisma, whereas Female increases the other two stats)
Your father was a...: a Warrior (+1 Strength, Agility and Charisma)
In your early life you were...: a Page (+1 Strength and Charisma)
In Adulthood you were....: a University Student (This might seem a little out of place, but it provides +2 intelligence and a random book. Books are very rare and expensive items and some are immensely useful. It also gives bonuses to the various party skills you'll need to keep your party going from battle to battle, namely Wound Treatment and Surgery)
Your reason for adventuring is: Revenge (+2 Strength)
As you can already tell, this is very much a power-house build, with a few initial party based skills as well. There are stronger options if you want to take them (namely choosing Squire rather than Student to start with) but this will make it more difficult keep your party going in the early part of the game and lose you that free book.

After this choose the "Allow me to quit without saving" option. It's just plain nicer for beginners, though once you're used to the game, make sure to try it with the realistic option, as it makes you play much more conservatively.

Skills
You've now created a base for your character, and if you've followed the above guide the numbers next to each stat in the lower left should look like this:

Strength: 10
Agility: 6
Intelligence: 6
Charisma: 8

You'll have 4 additional points to put where you want. Since the maximum level of each skill is determined by what multiple of 3 the relevant stat as reached (for example, a Strength of 10 will allow you to increase Strength skills to a maximum of 3. When you reach Strength 12, that will go up to a maximum of 4). I recommend putting 2 points into Strength, 1 point into Intelligence and 1 point into Charisma.

The skills in the middle column should be:

Strength Based:

Ironflesh: 1 (Increases your health)
Power Strike: 3 (Increases melee damage)
Power Throw: 0 (Increases Throwing damage)
Power Draw: 0 (Increases Archery damage)

Agility Based:

Weapon Master: 2 (Allows you to increase Weapon Proficiences at higher levels)
Shield: 0 (Reduces damage to your Shield)
Athletics: 0 (Increases running speed)
Riding: 1 (Affects the horses you can ride)
Horse Archery: 0 (Reduces penalties for shooting on horseback)

Intelligence Based:

Looting: 0 (Increases Loot from battles)
Trainer: 1 (Gives troops experience at the end of every game day)
Tracking: 0 (Reveal tracks of armies on the map)
Tactics: 0 (Increases how many troops your side gets against an opponent in large battles)
Path-finding: 0 (Increases speed on the map)
Spotting: 0 (Increases how far you can see on the map)
Inventory Management: 0 (Increases inventory slots)
Wound Treatment: 1 (Increases Party Healing speed)
Surgery: 1 (Reduces the chances of your Soldiers dying in a battle)
First Aid: 0 (Gives you a health boost after battles)
Engineer: 0 (Reduces times to build siege weapons or improvements
Persuasion: 2 (Persuasion is used in quests)

Charisma Based:

Prisoner Management: 0 (Increases how many Prisoners you can have)
Leadership: 2 (Increases how many soldiers you can have in your army)
Trade: 0 (Decreases shop prices, and increases sell prices)

You'll have a number of Skill Points equal to your intelligence after you place your attribute points. If you've followed the guide, you'll have 7 points. Place 2 in Ironflesh, 1 in Riding, 2 in Pathfinding, 1 in Prisoner Management and 1 in Leadership. This will give you not only a powerful warrior but also a very good leader build to begin the game with. The Pathfinding Skill is one of the most useful in the game. It allows you to catch weaker enemies when they're running away from you, and you'll need to fight weaker enemies even later on to keep your troops trained up.

If you see a green number next to a skill, then the book you were given has increased that skill by one. The most common book I've had starting increased my Trainer Skill, which is another one that becomes more useful later on in the game.

The final part of the character creation is the Weapon Proficiencies. This is easy for this guide. Stick 'em all in Two Handed Weapons. You'll start with a one-handed weapon and a crossbow, but Two Handed Weapons (especially a Sword of War if you can find one) are the ones I've found to be the most reliable way of disposing of your enemies quickly.

So there you are, choose a name and a look of your own choosing and dive into Calradia!

When you start, you'll spawn next to a training ground near one of the cities of the 5 factions. Swadia are orange, Vaegirs are green, Rhoduks are light blue, Nords are yellow and Khergits are purple. If you need to practice skills before heading out, enter the Training grounds, but before you start venturing out properly you'll need know more about which the factions before hiring volunteers from the villages.

Swadia

Swadians are the Medieval Europeans of the game. They have the strongest melee horsemen in the game, who are heavily armoured and wield a combination of lances and piecing weapons. Charging alongside a large group of Swadian Knights is a very gratifying experience and they are also very durable.

Their infantry is average, although heavily armoured which means they are slow compared the Rhoduks or Nords and they wield no ranged weaponry. They are able to take on pretty much any force once in combat with them, but against Khergits they really suffer badly. Nords also tend to attack faster, which can often make the difference.

The Swadians real weakness is their ranged capabilities. Although any crossbowmen are excellent against the armoured infantry of the Nords (or any armies in a siege), they will be cut to shreds by almost every other army on an open battlefield, as they can be easily taken out by even basic cavalry. They also lack the ability to effectively get round the enormous board shields of the Rhoduks, making them all but useless against even an entirely infantry based force.

As a general rule, always upgrade Swadians Militia to Footmen, rather than Crossbowmen, then Men-At-Arms, rather than Infantry. It's what they do best. Swadians are an excellent starting faction precisely because they have this incredible core of cavalry that can punch a nice big hole in enemy formations.

Vaegir

The Vaegir are an Anglo-Saxon type faction. Their main strength is their archers, which use the best bows of any archers in the game and are also much more accurate. This makes them very powerful defenders during a castle siege.

Their cavalry is also good, albeit not as good as the Swadians. The main reason you might prefer Vaegir Knights is that they move much faster when dismounted, which makes them a little bit more versatile than their chivalrous counterparts.

On the other hand their infantry is the worst in the game, but not by much. Vaegir Guards are better armoured than Rhoduks but lack their powerful pike and bill weaponry. Although not weak, they will get beaten by any mounted force with lances or bows, as they lack secondary ranged weapons and use axes (which are too short to deal with riders).

Perhaps the best thing about the Vaegirs is their versatility. You can start the game taking Knights, then get some more recruits and make them archers and you've got a very solid party based around a single faction. You'll need something else once you're wanting to besiege though, as none of the troops are really designed for it.

Rhodok

Rhodoks are one of two factions in Mount and Blade that have no mounted units besides their lords. This means that they only have two pathways, spearmen or crossbowmen, and both are at least above average, especially as they work so well together.

Rhodok Sergeants are easily the best anti-cavalry infantry in the game. They wield bill-pikes, which will cut even Swadian Knights down from their horses with a bit of luck, and the remainder of their force all wield large shields called "Board Shields". These can't be used on horseback, but cover the entire body and protect them from all but the largest cavalry charge. They also wield spears, which means they often quickly jab at slower moving infantry (which is almost every other kind of infantry) and take them out that way. Combined with faster and more accurate crossbowmen than the Swadians they may be a narrow force but it works.

Rhodoks are not a faction I recommend grabbing volunteers from as a beginner. You'll need to grasp how to use the orders system very quickly otherwise, since you'll need to keep the spearmen holding with crossbowmen behind and branch both sides evenly. If you're playing for the first time, you'll want a very strong cavalry contigent and the Rhodoks cannot provide you with that. It might be worth grabbing a few if you're at war with Swadia or the Khergits later on but otherwise there are better options to start.

Nord

The Nords are a Viking stereotype. They are the second army that uses entirely infantry after the Rhodoks but they do it in a very different way. Their infantry is the best all round of any of the factions, as they are fast, well armoured and very powerful. They are also surprisingly accurate with their secondary javelin weapons, which makes them arguably the best siege warriors in the game, as they can take out archers on the way to the walls and then take on almost anything else when they arrive.

Their archers are a bit better than the Rhodok crossbowmen, as they are less powerful but fire off more arrows in a shorter space of time. They are probably the second best archers after the Vaegirs, which combined with their powerful infantry makes them a brilliant defensive army. They are quite lightly armoured compared to the infantry though, so you'll need to protect them from flanking cavalry

Like the Rhodoks, I don't recommend starting off with a Nord army. While much more forgiving than the Rhodoks they still lack the enormous damage potential of a strong cavalry core. They are a very good army to use for garrisons or sieges, which makes them a very good choice once you've joined a faction and need to take castles.

Khergit

The Khergits are a Hun/Mongol faction and are entirely mounted. This obviously makes them very fast and very difficult to handle when facing the other factions. Their main strength is that they are the only army to have mounted archers, which can harrass slower enemies or heavy cavalry for long periods. What can be really scary is that against large armies of bandits they will often totally crush them without ever having used swords, since they run rings around them and just fill them full of arrows. They don't have a big punch, but they can quick jab over and over which is the antithesis to the Swadians.

Their melee cavalry is also above average, Khergit Lancers can generally beat Vaegir Knights if they get the first attack in, but they lack the heavy hitting weaponry of the Swadians or Vaegirs. Thier lower level melee horsemen will definitely need protection if fighting any of the factions with high level troops since they wear virtually no armour until they reach Lancer level. Something to keep in mind is that until you get Lancers, they are incredibly fragile. If they get bogged down fighting infantry or cavalry from another faction they will almost certainly die.

They are a lot of fun to play with to start, though I wouldn't recommend it until you've got a good melee cavalry contigent. That way you can use either the Swadian or Vaegir Knights alongside Khergit Horse Archers, which is a nasty combination in an open battlefield.

Conclusion

Get volunteers from the Swadian (Orange) or Vaegir (Green) villages to start off with. Once you've levelled them, and yourself, up a bit (I tend to wait until I have 20 Knights, which will take a while) go grab some Nord (Yellow) or Khergit (Purple) recruits. Only grab Rhodoks (Light Blue) if you're after a challenge, or are at war with Swadia.

This is going to be a very short section, since the companions you'll find will be random and their skills will basically determine their build from the start. What you should aim to do is ensure that your companions can build up Intelligence to take a large selection of party skills. Only the highest skill applies to your party, so if you've got someone with Surgery 4 and someone with Surgery 3, you only have Surgery 4.

Try and keep two companions with the Wound Treatment, First Aid and Surgery Skills at high levels in case one decides to leave, one with a high Engineer Skill and one with Tracking and Spotting. Looting is also very helpful, as is Trade but only if you have a high Inventory Management skill yourself.

If you find more companions try and ensure they all have Trainer to get your party levelling up very quickly, as Trainer isn't based on who has the highest skill, it grants experience provided all of the troops are a lower level than the companion.

Hope you've enjoyed the guide! Once you've played through a bit, maybe reached about 150 game days start again but try a different character setup. You'll have enough experience by that stage to know what does what and what does or doesn't work. Most importantly, have fun and don't feel constrained, go Rhodoks if you want straight away or run around alone taking on all who oppose you. Especially Looters.