Welcome (back) to the game!
As for your question about the game that WotC left us (before the Virtual Sets came into play), Mando is correct: there are some factions (Old Republic, Sith, Mandalorian, Yuuzhan Vong) that were significantly underpowered compared to others (Imperials, Rebels, Republic, Separatists)...at least from a competitive standpoint. Of course, you're welcome to play at whatever power level you prefer. One of the main goals of the initial V-Sets was to try to balance all the factions so that every single faction had several different competitive options. Playing with a WotC-only collection is totally fun too. It just depends on what your playgroup enjoys the most.
One way to get (back) into the game (which I used when teaching the game to my kids) is to 'release' one set at a time. Start with the first set (Rebel Storm) and play a few games with a variety of those pieces so that you have a chance to figure out how they play. Then when you've gotten a bit familiar with those pieces, 'release' the next set (Clone Strike) and so on, until you've explored all of the various pieces and squad types. We've found this to be a fabulous way to re-live the history and development of the game, and also to discover all of the various pieces along the way, some of which are inevitably replaced with stronger versions in later sets.
General Obiwan Kenobi (aka 'GOWK') has the Soresu Style Mastery ability on his card (he prevents all damage from any attack with a save of 11). That, combined with Mettle and Master of the Force 2, means that he can sometimes need to roll just a 3 to prevent all damage that comes at him from an attack. For this reason, he was banned for a while and errata'd too, so that he just had Soresu Style (which is really just the same thing as Evade) and so he was defenseless vs melee attacks and against attacks made by adjacent enemies. That made him significantly weaker, so that just about nobody used him again for a long time, until his original abilities were restored...but I don't think that happened until after the V-Sets started being made (though I might be wrong about the timing here).
If you're interested in the RPG or in making your own version of an RPG using the SWM rules, then I want to recommend this to you (it's a thread here on BlooMilk):
Star Wars Adventure Gaming Take a look and see what you think of it, before you put all the effort into building your own. I played a version of this with my boys several years ago, and we loved it. I think it's really well thought out.