Some observations on what's been said here so far are:
*Newspapers are on the decline right now. Aside from the fact that many, many people have been turned off by their one-sided reporting, people are bombarded with hundreds/thousands of ideas and images daily, and have no time for papers unless they have a local angle, or contain information that affects them personally. The boob tube has replaced the printed image when it comes to predigested news. It's also up to the minute, unlike old printed news.
*As I tried to point out yesterday, the cost of producing a little tabloid is minimal, just a little over $100 for an 8-pager with one extra color on the masthead. You're not going to have to raise thousands of dollars. Newpapers are dirt cheap to produce.
*The "programs of choice" to produce papers are PageMaker or Quark. No print shop will accept MicroSoft Publisher. They call it a toy program. You have to submit your stuff "camera-ready" and they shoot and print exactly what you send them with absolutely no changes.
*Forget paid writers. Every other Freeper I meet is a writer, and why would we waste time and money printing someone else's opinions. The key to getting read is not who you are, but what you have to say.
*Digital photos are not only perfectly acceptable, but are in fact preferred by every printer I know.
*For starters, one of the best (and safest) ways to distribute is to put the papers in the "free literature" racks in every public library. There's some pretty good stuff to be found there.
*My personal observation is if you want crediblity, use a spell-checker and many proofreaders. People assume if you can't spell, why should they pay any attention to anything you have to say. I cringe when I see some of the spellings that show up on otherwise GREAT Free Republic articles.
*As far as learning the ropes, there are many good "how to" books that will tell you everything you need to know. It's not brain surgery. The secret is not to waste a lot of time and money reinventing the wheel. To get a great design, go find the best looking tabloid you've ever seen and copy the design and layout precisely. (No the design is not copyrighted). Copy great headline styles, writing styles, layout styles, etc.
On a pessimistic note, of all the Conservative tabloids I've seen try to get started in the past few years, only one is still alive and thriving, and it's got one single topic, and is dedicated to a very local community issue. One young fellow is trying to get one going for young Republicans at the UW, and even with the backing of the Republican Party, he's really struggling.
Anyway, I don't have the time to do a paper, but I'm sure available to share any knowledge on the subject I might have.