I don't know that you need to go to the trouble of starting them indoors, I always just sowed the seeds directly on the soil. You don't want to cover them with soil as the germination is triggered by light. No special soil, no special water.
Don't know what part of the country you live in but the plants are partal to humidity and heat, obviously, as most tobacco is grown in the south.
Once the plants are growing you need to watch for, and remove, the sucker shoots. Just like growing tomatos.
The drying process is the most critical, IMO. As someone posted earlier, you tie the leaves on to a stick so they get enough air around them to prevent them from molding. Hang them in a dark, dry, room. Tobacoo barns used to have big furnaces in them and the sticks would be hung on rafters all the way to the top of the barn.
Once dry and after you have cleaned the tobacco off the leaves it will probably be too dry to smoke. You should get a humidor to put the tobacco in and add a tiny piece of orange peel to add a little moisture back to the tobacco.
This link has quite a few photos:
http://www.webshots.com/search?new=1&source=mdocsheader&words=drying+tobacco
I speak as one who has worked the tobacco field in my youth, 40 acre plot owned by a friend of the family between Garner and Fuquay-Varina N. C. The pics on the link are interesting in a historical context, but if you are looking for anything approaching what one buys as ready-rolls for the last 40 years, no relevance whatsoever, modern tobacco is cured in seatainer sized metal containers with gas-fired hot air continually forced through the tightly packed leaves, which are crammed into spiked racks and lose about 85-90% fresh picked weight as they dry. The process is quicker, more compact, and a darn sight safer than the old barns pictured in your link.
Those old wooden barns pictured, some had furnaces, some just had a regularly tended bed of coals on the floor and every season a few would flame up. Only reason the VFD even responded was to keep the surrounding woods from going up, the things went up like the fourth of July.
As to cutting the plant and hanging it upside down, someone has tobacco and left-handed tobacco confused. Part of what made 'baccy picking such a nasty, labor intensive job was that the leaves are plucked from the bottom up, starting with the "sand lugs" (four per plant and useless) that literally lay on the sandy soil, and coming up the stalk about 24 to 48 hours apart, two leaves, sometimes four, per plant per pass. Pick two, stuff'em under the arm, pick two off the next plant. Arm gets full, trot to the sled at the end of the row, dump and repeat. Between the heat and the transdermal absorption of nicotine, it was common for workers to hit the end of a row, dump, puke, get a drink, and start the next row. Called "the monkey" in my day.
Starting indoors might not be a bad idea, I would not attempt full growth there unless demanded by the climate. '70, when I did this, the seeds, which are incredibly tiny, were started in seedbeds which had first been cleansed with methyl bromide, a chemical since banned which would kill all competing weeds and bugs, along with the occasionally careless field hand. That evaporated quickly, no doubt improving the area air quality, and the seeds were put in and covered with 10 mil plastic until they got a few inches high, then hand transplanted about two feet apart.
Full grown plant is about six to eight feet with leaf sets about six inches apart up the stalk, had to be suckered regularly, and all this in the hottest, most humid part of the year. On the off chance there was a breeze that day, the rows of tall plants assured that no such relief got to the workers. I leave as an exercise for the student figuring the hand labor involved and translating that into the huge influx of Spanish speaking laborers of questionable legal status in east and Peidmont Carolinas.
Try it if you really want. Factor in labor and I think you will find that buying loose leaf and a good rolling machine is cheaper. No doubt about it, the nastiest job I've ever worked.
As to being too dry to smoke, that is part of the art, catching the cure at the right time. You don't want to dry into autumn leaves that crumble when you crunch. It should crinkle when clenched in the hand, not crumble into powder. As to "after you have cleaned the tobacco off the leaves", I'm not sure what that means. The leaves ARE the tobacco. Possibly, especially on the large sand lugs, one might want to cut out the central veins, which can be as big as a #2 pencil with nearly the same consistency.
As to legality, after the Raich decision on medical marijuana, totally up in the air. Stevens' opinion specifcally linked it to the '42 Wickard case. In Wickard, a farmer growing wheat strictly as a feedstock for his own livestock, no resale intended or alleged by the gov't, was nonetheless restricted under the broad interpretation of the interstate commerce clause in that by growing his own, he reduced market demand for the grain by the amount he grew and therefor did not have to purchase. I have to think Scalia was seduced by the drug war connection, especially since he and Thomas totally flipped on Spector the same day, a case applying ADA rules to foreign flag cruise ships, also under the commerce clause. The surprise to me was Sandra O'Conner's consistency in opposing the expansive interpretation of the commerce clause in both cases. No matter anyway, even with Scalia joining Thomas, Raich and Spector win 5-4 instead of 6-3.