Where should I start?  If I'm working with fifth graders, do I start with Sequential Spelling 5?

No.  Unless your students have been exposed to Sequential Spelling before, you should start them with Sequential Spelling 1 or maybe even Sequential Spelling 2.  See Quick Start for more detailed information.  See also: Scope and Sequence of Sequential Spelling levels and Customizing Sequential Spelling.
 

Regular spelling texts, as a general rule, pick grade levels for words according to when the specific words first begin to occur in the regular subject matter curriculum.  This would seem to make sense, but it does bring about some rather odd sequences.  Since the word ice may not occur in the curriculum until the 4th grade when it appears in the science class, its introduction is delayed until that time.   Note that in one spelling series the word nice occurs in the 1st grade, twice in the 2nd grade, price in the 5th, and rice in the 6th.  AVKO believes in teaching all the ice words in the same unit. 

Regarding the word scatter,  AVKO teaches it only after the -at sound has been taught in 30 different words.  After the -atter sound has occurred in eight words, and directly after the initial c in cat and the consonant blend sc in scat, then and only then do we teach scatter.   Nearly every student gets it right the very first time.  See: AVKO's Approach vs. Traditional Approaches.
 

We don't believe it hurts anyone, even a child, to learn a new word.  But that is not why we use the word tat, for example.  We use the word tat for more practice in sounding out spellings of words having the initial /t/ sound and practice in spelling the ending rime -at.  It also gives the student a pleasant surprise and ego boost when he discovers he can spell a word that he believes he has never heard nor seen before just because he knows how to spell the sounds.  See also: "On Sequential Spelling Word Lists"
 

Since the students get to correct their own spelling, they should be expected to write clearly and legibly.  In fact, we recommend that these sequential spelling tests be used for handwriting practice because the patterns, being repetitive, can be a help in developing legible handwriting.  We further recommend that if your students print, that they use D'Nealian® manuscript or AVKO's own manuscript (See Let's Write Right). But whatever system of handwriting your school system may require, we believe that writing must be legible.  So yes, by all means, take off for sloppy handwriting.  The only exceptions would be for those who have a physical disability or insufficient small motor skills to write legibly.  See also: Kate Gladstone's Handwriting Repair.
 

Do I give my students the words to study?

No.  This is one of the starkest contrasts between Sequential Spelling and traditional programs.  However, if you feel you must, go ahead.  We have found that students prefer not having to study and that when they correctly spell words that they haven't studied, their self-confidence about spelling begins to zoom.   See: Sequential Spelling 1 Sample (PDF) with complete instructions and script for using Sequential Spelling.
  

How do I give grades?

If you must give grades based upon performance, there are five posttests after 40 or 20 day intervals throughout each of the Sequential Spelling levels. To see all of the posttests for each level of Sequential Spelling, please see Sequential Spelling Scope and Sequence.
  

How many Sequential Spelling books do I need for my classroom?

At the minimum, you need one copy of the Sequential Spelling level you wish to use; each level of Sequential Spelling automatically comes with one free copy of the Student Response Book for Sequential Spelling.  One Student Response Book for each student would be very, very convenient and we do recommend that.  However, by using one student response book as a model, you can create your own model for your students to make from spiral notebooks.  See also: Template for printing your own Student Response sheets (PDF)
  

Can I give more than one test a day or repeat the same test later in the day?

Why not?  You're the teacher.  You know your kids better than we do.  The important thing is to have fun with the tests.  Help your students overcome their fears of making mistakes.  They'll love you for it.  See also: Customizing Sequential Spelling.