I would say starting at level 1, but do it the way 420 mentioned with some neat little intro quests and whatnot that get you started. However, starting in the middle of hell sounds excellent. What do I mean? I love game intro's where you start out right in the middle of conflict. Like beginning in a jail cell and getting out and finding out what put you there. Or starting unconscious from a battle you don't get to find out why you're in right away. Wanting to find out what got you into that situation in the first place is alluring to me.
As for the length, I think neither long or short, but both. A mod where the gameplay is long and entertaining if you want it to be, or short and to the point if that's what you desire. There's a main plot and you can choose to stick to that as much as possible and have a short but fun gameplay, or choose to do many side quests that increase the length of the game, without spoiling it because it's too drawn out. Many side quests can be small or mediocre, while a few could be big and have a big impact on the world the player is involved in.
Heh, I guess I like a lot of middle-ground.