Back into the water box. If you drive through it your front tires will get wet and when launching you will be driving through the water shed by the front tires.
Start launching when you see the last yellow on the tree turn on. If you wait to see the green light come on you will be very late with your reaction time and the other car will be on it's way.
I always stage first, because I want to be there waiting for the other car to stage, as soon as it stages, I immediately run up my R's and get ready to launch. I've seen the lights start within seconds of when the last car stages and I want time to run my R's up to launch without being pressured by the lights starting before I'm at proper RPM.