As has been said, cavalry is king. Nevertheless, so long as the Vampire Count player is only taking an equal number of cav you should be fine. I'd only max out on cav if it were a competitive game, or you knew your opponent would also do so. Tournaments are another matter however

Infantry in forests is nice, but can't really do anything other than deny break value to enemy cav (which you might argue is the point of all infantry bar dwarves in warmaster). Unfortunately as Araby doesn't have war machines, this means at best a 30cm exclusion zone from archer fire around forests, but in practice, getting the orders off the get the infantry in with a human hero and the associated penalties of ordering in the woods, make this a pretty unlikely scenario unless there are woods on, or very near your deployment zone.
Infantry on a hill is a nice trick, although again IMHO it works best with war machines in support, to draw the enemy troops or provide a much bigger exclusion zone. Again the difficulty will be in getting the infantry up there with human command values. Might work against undead, but you'd be easy meat to a command 10 army I'd imagine.
In your situation mind robber, I'd try some basic games first, then when you are more familair with the rules, try some scenarios where infantry may find additional uses.
As to why infantry are weak, First: basing. Three stands of cavalry fight 2 stands of infantry. Second: Saving throws, cav usually have superior saves. Third: higher movement means cavalry will be the charger, and potentially even in the flank (which really rips infantry). Fourth: Infantry can't pursue cavalry. So even if you do hurt them, you are unlikely to break 'em in one turn. Consider: a unit of Araby knight charging enemy skeletons, in the open. The Knights have 12 dice on the attack (4 per stand). An average of 6 hit. An average of one wound is saved by the Skeletons. Fighting back the skeletons attack with 4 dice (2 per stand) so an average of 2 hits. On average the knights make 1 save, so a total of one wound is dealt to the knights, while 5 wounds are dealt to the skeletons. A stand is removed with 2 carry over wounds, and the unit is driven back 4cm (5-1) which means on the next combat, which begins immediately the knights now have 15 dice to attack. Rinse and repeat. Even if the skeletons charge they are only going to be able to fight with 2 stands, and have a total of 6 attacks (3 per stand) against the 9 dice of the knights. Using the same averages, 2 wounds are done to the knights, while 3-4 are done to the skeletons. The charging skeletons are pushed back and suddenly the knights are following up with lots of attacks!

Although to be clear; with a good general, good terrain, high command value, or special infantry the infantry vs cav battle is by no means a forgone conclusion. Also, this take on cav is not inconsitent with how Fantasy Battle works, so it is kind of neat like that.
I guess Mirage is pretty useless against the undead?
Not at all, although against VC who don't shoot at all, I imagine it'd only be used to disrupt line-of-sight for charging purposes.
Does anyone have experience with this supplier ? should we use the 10 or the 15 mil scenery bits (as from practice I think for houses etc a slightly oversized look actualy is better....
I wouldn't have suggested it if I hadn't sampled it. The 10mm City in a Box is awesome in my opinion. The scale is very nice, and there is reasonable detail. Below are some scale pics so you can judge for yourself. I haven't cleaned or painted the buildings, they are straight from the 'box'.


