This thread is a follow up to my previous one. It's in fact 2 questions, so I hope no one minds, as they are dependent on each other.

We are starting a new project at work and we consider it as a great opportunity to try Agile techniques in action. We had a brainstorming about ideas we read in several books and articles, and came up with concept that would suit us the best: 2 weeks iteration, followed by call with clients who would choose what stuff they want to have in next iteration. I just have few more questions, which we couldn't figure out ourselves.

What to do in the first iteration?

What to, generally, do in the first few iterations if we start from the scratch? Just give it a month of development to code core of the application or start with simple wire-frames with limited pre-coded functionality? What usually clients want to see? Shiny stuff that doesn't work or ugly stuff that does work?

How to communicate with clients?

Our initial thought it to set the process to something like this:

Is it a good idea to have a Focal Point on client side or is it better to communicate straight with all the clients to prevent miscommunication?

Any thoughts are welcome! Thanks in advance.