So I thought I'd give Arena and Daggerfall a shot. I'm sure that some, if not all, of these questions have been answered before, but after going back ~10 pages and not finding anything I'm just going to ask them (forum search has not been working for me for some reason).

1. I keep hearing something about how important it is to have paralysis resistance in this game to the point that playing an Altmer or a Knight is almost mandatory. Are enemies that paralyze that abundant, or is the ailment itself that powerful as to make this true?

2. Which races/classes would be better for someone new to the game? I'm used to playing rogue-ish characters in the later games but I understand "Stealth" doesn't really exist in Arena. I also noticed only 3 classes are available to use plate armor, and only that can be enchanted. Is not having access to it that much of a handicap?

1. It's not mandatory to play either. Any Race/Class combination can be successful, paralyze is simply an annoyance which can be easily negated by enchanted equipment which allows you to use a free action spell. In Daggerfall the immunity to paralyze trait can be combined with the weakness to paralyze trait to create a more munchkin custom class.

2. Iv never actually completed Arena as of yet, however in Daggerfall practically everything can be enchanted. Leading to ridiculously powerful gear once you get access to the item enchanter through the mages guild. The lack of plate armor really is not that much of a hindrance. I usually go for Argonian mage or spellsword. Rouge-ish classes really are not as effective as in later games as there really is not as much of a stealth dynamic.

Also if your new to Daggerfall probably the best beginners guide would be this nifty site: http://www.tesguides.com/tes2/

I'm trying to start Arena right now but will keep your advice in mind for Daggerfall.

ATM I've narrowed my choices down to either a Redguard Knight, or a High Elf Battlemage. Thoughts?

I'd go with the Redguard Knight for a first Arena character. Durable and simple.

New question: does anyone know precisely how does the knight's "repair" ability work?

It should automatically repair your equipment as you rest or time passes, If memory is correct.

So, after playing around for a while with the Redguard Knight I decided to give the spellcasting classes a spin with a Nightblade. I have to say I'm enjoying the caster gameplay more so I'm thinking about switching. The only question remaining is, does the Nightblade's Critical chance and lockpicking make up for his reduced Spell points and limited weapons, when compared to the Battlemage, or is the Battlemage the superior choice?