Is it textured? Perhaps just choose a brownish brown in a similar color to the color of the cedar on the house? I'd definitely choose a flat paint. You're right that painting it over once the trim is on will be difficult, but I'd worry about that when that comes around (just remember you need to use latex on hardy board, oil will degrade it). Ace sells decent quality paint, choose the $30 per gallon and up options (not the cheaper $15-$20 options they also sell). You shouldn't have to repaint it for at least 5 years, and if you go with a beige/brown color, fade wont be noticeable and you can probably get 10 years before you have to repaint, so I'd not paint the trim, having it natural will help it match the house. For the siding, make sure you PRIME it first with the hardy panel primer (yes it requires its own brand primer): http://www.jameshardie.com/homeowner/improveYourHome_resideYourHome_tipsArticles_painting.shtml additionally they recommend ACE's Royal Shield 100% Acrylic Latex House Paint as the only appropriate ACE brand paint, but perhaps their guide is outdated, as the clark and kennisington seems higher priced (and generally yes, you get what you pay for with paint), then apply at least 2 coats of the latex based paint (I'd do 3 thinner coats). Their website says you should buy an acrylic latex exterior paint suitable for masonry/cement, so make sure the paint you choose is suitable for painting concrete. Do not use oil based paints/stains, stick with latex based paints. If you choose to oil prime the cedar batts, do them before putting them on, and put a coat of latex paint between the oil paint and the hardy board. Oil paints degrades hardy panels.

I too vote stain. Just had our place re-stained (solid latex stain)after 15 years. I'd use a high quality or you may regret it. Latex stain will flake, but it doesn't peel like paint. Oil stain is different, you won't get either. However, I had oil on mine at one time, and I did get algae from where the sun doesn't hit on the siding (north side). Someone explained to me of why it happens with oil stain. If I wasn't so lazy, I could look it up! :) I'm not real crazy about the idea of power washing any wood. Real easy to force water into the fibers and destroy the wood. I don't believe paint will keep carpenter bees away. A relative has painted cedar, and there are bees galore. I spray my place down every year with an insecticide, but you have to be careful around flowers, don't want to kill those bees. I have no problem with carpenter bees.

So we did some more test painting and decided on the muted gray/blue for the main sections, similar to what gracie linked. We tried 2 different trim colors and are feeling like the dark gray blends in too much with the blue. The lighter gray seems to have more contrast. What does everyone think? Also, what would you recommend to paint the lower concrete section of the house. The lighter gray trim color if we pick that? Or would you possibly paint it a darker gray like the trim we weren't digging? Gray/Blue with light gray trim: Gray/Blue with dark gray trim (on right side of garage): Closer pic of Gray/Blue with darker trim: lighter trim in the shade: Close-up of lighter gray trim: (Middle of pic): Lighter gray trim again. Lower concrete section that will need to be painted:

Is there paint on it now? If so, you cant put stain on over the top. You will have to repaint it, or use a solid color stain (the grain wont show through, like regular semi transparent stain). I would try to do a color very close to actual cedar siding color.