Just starting out in Illustrator, assistance needed!

Hi everyone!
Okay, I'm a long time Photoshop user, first time Illustrator user.
Story: My Mum and I are tag-teaming in designing a logo for a company which sells organic beauty products. Mum is a graphic designer from way back...the kind who made their living long before computers were ever used for the job. She has designed a great logo, while I'm doing the computer side of things (i.e. everything else).
So naturally, I have some questions, and I'm hoping there's someone out there who could guide me in this.
I have discovered that commercial printers want work in Vector files, which is what has brought me to Illustrator. And that's fine, I'm fumbling my way through layouts relatively okay, because I've been using PS for years. But, in these early stages, a few issues have cropped up.
1. My label designs will be printed on a clear label. How do I make the background transparent?
2. How do I scan my Mum's hand drawn logo to make it into a Vector file?
3. The labels will be mainly monochromatic (black/grey). Do I need to seperate colours for commercial printing? How do I do this?
4. What file format should I save my work in for printing?
I've been hearing a lot about LiveTrace, but the problem is - I'm using Illustrator 10! I know, it's old, but it does the job. So any advice that pertains specifically to Illustrator 10 would be great (dust off your memories!)
Please speak in layman's terms with me. Although I'm familiar with PS...the concept of Illustrator and Vector files is very very new to me, and I won't understand complicated actions/terms.
Thank you to anyone who can help me on this, I'll be checking in often.
Cryssie

1. My label designs will be printed on a clear label. How do I make the background transparent?
You don't -- there is no background! (Same as in PS with a new file consisting of one layer.)
2. How do I scan my Mum's hand drawn logo to make it into a Vector file?
Use a scanner
But seriously -- Illy doesn't provide any bitmap stuff. Scan & clean up the image with Photoshop, only then import it into Illy. Put on a layer of its own. Make it slightly transparent. Lock that layer. Create new layer on top, draw lines over them. Done.
3. The labels will be mainly monochromatic (black/grey). Do I need to seperate colours for commercial printing? How do I do this?
What does "mainly" mean? If it's mainly black/grey but still plus some color, that's still color. And even a little bit of color is more expensive than black & white (with, indeed, optional gray).
As for separating the colors, you don't need to. You might want to look into Pantone (spot) color vs. Full color. They both have their advantages, but it's a bad idea to use both.
4. What file format should I save my work in for printing?
Illustrator ought to do fine. In case of doubt, also save as a PDF.

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