Strengths:
Excellent HP rating of armies.
First strike guaranteed
Phoenixes have a nice growth rate! In fact, they're the only ones that grow two units basic production... Therefore, even with their lower A/D ratings, they can be compared to the best 7thlevel units, since you can afford to take two phoenixes against one Archangel/Dragon/Titan...

Weaknesses:
Those nice durable troops are unfortunately quite costly
Magical vulnerabilty of those elemental types can be dangerous if you face AI heroes early in the game.

Army evaluation:
Pixies 2/2/3/1-2/7/25
Sprites 2/2/3/1-3/9/30, no retaliation
An important unit - crucial in early exploration, the only non-retaliated 1stlevel.

Air elementals 9/9/25/2-8/7/250
Storm elementals 9/9/25/2-8/8/275, shoots, no melee penalty
Vulnerability to lightning makes them less durable, but with their speed and good HPs, they make a good shooter.

Water elementals 8/10/30/3-7/5/300
Ice elementals 8/10/30/3-7/6/375, shoots
Fire is not as damaging as lightning, so you can expect them to last a bit longer than Storm folks.

Fire elementals 10/8/35/4-6/6/350
Energy elementals 12/8/35/4-6/8/400
Average fighter.

Earth Elementals 10/10/40/4-8/4/400
Magma Elementals 11/11/40/6-10/6/500
Quite lousy before the upgrade. After it, still the lousiest 5thlevel, but they make good damage soakers.

Psychic elementals 15/13/75/10-20/7/750, immune to mind magic, no retaliation, attacks all adjacent enemies
Magic elementals 15/13/80/15-25/9/800, immune to magic, no retaliation, attacks all adjacent enemies
If used wisely, this unit will score tremendous damage. The bad thing is that it cannot profit from beneficiary spells.

Firebirds 18/18/150/20-40/15/1500, immune to fire magic
Phoenixes 21/18/200/20-40/21/2000. immune to fire magic, rise from the ashes
The fastest unit in the game, they guarantee first strike. They're also with their doubled growth compensating for lesser durability.

All four elemental units have some magic immunity and some magic vulnerability. Also, after upgrade, they are able to cast Protection from their element of magic.

Upgrading priorities:

• Sprites - a good upgrade... they're virtually worthless without it, since they die quickly in retaliatory attacks.
• Storm elementals - necessary in early phases for the shooter attack.
• Ice Elementals - same as Storm.
• Energy elementals - low priority. The upgrade brings little difference, only the +2 speed could force you to upgrade.
• Magma elementals - medium priority. They gain more punch and +2 speed, which in their case is more important than it was for energy elementals.
• Magic elementals - a good upgrade that brings damage increase along with +2 speed boost. They, as a crucial attack unit, need to be as fast as possible to afford waiting in battles.
• Phoenixes - an important upgrade, the only that increases HPs and also gives you first strike in all battles.

Castle building in the first week:

Day 1:	Town Hall	2500g
Day 2:	Mage Guild	2000g +5w +5o
Day 3:	Altar of air	1500g +5o
Day 4:	Altar of Water	1500g + 5o +2c
Day 5a:	Altar of Fire	2000g + 5o +5w +2m
Day 5b:	Temple of Clouds	1500g + 2o + 2w +2g
Day 6a:	Altar of Earth	2000g + 10o
Day 6b:	Temple of Ice	1500g + 5c
Day 7a:	Altar of Thought	3000g + 5o +5w +2cgms
Day 7b:	Citadel	2500g + 5o

There are many variants of the building order - I've picked two extremes. The a) variant aims at quick exploration with minimal losses... it assumes that you upgrade Flower of Life on Day1 Week2 to get non-retaliated flyer (with some extra troops from starting heroes) along with two shooters.
The b) variant assumes that you don't hurry anywhere or you need some good walkers (and four psychic elementals are quite a strong force)
Both of these variants can be enhanced if there's any of the first three picks already built. In case of b) variant, it can be wise to skip TownHall in favor of Citadel, if you can get some extra gold from the map.

Resource summary:
For a) variant, you'll need 15w, 35o, some cgms and 14500g, which leaves us (20000 + 7000 - 14500) = 12500g for Day 1 to spend on troops.
For b) variant, you'll need 7w + 22o, some cgms and 13000g. And that's about how much will the first three upgraded troops cost on day1.
When choosing the right variant of build schedule, take ore requirements into consideration, since the b) variant is lower on them.

Troops cost weekly (with castle):
Without 7th level: 20500
With 7th level: 28500
Without Capitol, you'll probably want to save 8000 a week by not buying the two walker elementals, but even than you'll be 6500 short of the requirements for all-out sale. Once you get Capitol up, it'll cover all your production, but if you keep avoiding the two lower walkers, you'll quickly catch back and be able to buy out all shooters, sprites, phoenixes and psychic elementals from the earlier weeks.
HPs grown weekly: 1800 (plus 800 in phoenixes) at 11.39 g/HP (10.96) - Phoenixes are the only 7thlevel, that actually makes your average HP cost lower.
This gives you second place among all castles in HP production.

Benefits:
Blacksmith: Produces Ballista war machines
Artifact Merchants: Trade resources for artifacts...
Resource silo: adds 1 mercury per day. In long games worth it.
Pixie branches: Increases growth of pixies by 10 - important one.
Shipyard: Allows ships to be built.
Magic university: Heroes can learn (for 2000g) magic schools.

Strategy
You'll need some ore in the first week, especially if you choose the dwelling-oriented variant. In that case, you should also try to get as much gold as possible in order to be able to complete all moneygenerators in the second week...
In the long run, you should focus on getting firebirds ASAP... You don't actually have to recruit them, but get the dwelling soon. Their nice growth rate will be worth it and the 10 mercury, wood and ore should be easy to obtain...

Forces combination:
With Capitol built, you can afford to recruit anything except magma elementals... (You could leave out any other unit, but magmas are the slowest). They provide an excellent defensive unit, since the only damage spell that really hurts them is meteor shower... (and therefore, the attacker will be only able to attack from distance (and by spells) or at close range with no spell support.
So, you'll probably use the two shooters on the run. Note that both those shooters are quite good compared to other 2nd/3rdlevel troops. In fact, the only 3rdlevel with comparable hitpoints are Iron Golems.
Of the ground walkers, Magic and Energy elementals form a good pair... the Energy folks are a good damage absorber, while the magics with their all-round attack are the 'main' killer unit. Yet the magic folks suffer from low HPs, so you should use them cautiously. Also keep in mind that you can't help them with ANY kind of magic!
In early phases of scouting and exploring, you can divide your troops into two armies... One hero can lead the two shooters (their stacks should be quite numerous, so they could be splitted) with either phoenixes or one walker as a cover force. The other hero can have sprites and walkers to deal with walkers/flyers... This hero should, however, definitely try to develop expert Haste/Slow so as to assure tactical advantage for the sprites...

Heroes:
All planeswalkers are elementals that provide some stat boosts to their elemental type in battle. Along with A/D boost, Thunar and Erdamon boost Earth/Magma elementals' damage rating by 5 points, suddenly making them a VERY useful unit, while Ignissa and Fiur get less significant +2 for Fire/Energy elementals... Monere, on the other hand, starts with Logistics and Tactics and enhances A/D of magic elementals... he's the best choice, IMHO... at least in larger maps. Planeswalkers generally get good skills at start - Offense and Tactics appear often.
Among elementalists, the nicest folks seem to be Labetha with Stoneskin, Brissa with Haste and possibly Inteus with Bloodlust. Gelare and Grindan (+350 gold) are ideal secondary heroes. Also, the Luna's return with doubled Firewall can be a good pick for a primary spellcaster. Note one important thing - all elementalists start with magic school corresponding with their special, so you'll have one less worry.

Skills important for the troops and strategy:
Either Air or Earth magic for Haste/Slow purposes would be good to any hero, including Planeswalkers. Since the basic elemental types are vulnerable to some kinds of magic, maybe even Resistance could be considered, since it's quite probable that opponents will hardly resist the temptation to fry the storm elementals for double damage...
Water magic could be also considered as an important skill. Not only it provides Mass Prayer that makes Haste obsolete, but it provides (with much higher probability) Bless... and with 50 sprites/week, the max+1 damage really counts, not mentioning that the lower elementals have quite wide damage ranges.
Other than that, the troops are a mixed bag stuff... yet if you'll accept the archers/walkers force division suggested above, you might want Archery for the shooter-based army.

Unit	A	D	HP	Dmg	Sp	$$	AdjD	Dm/g	grow	weekD
Sprites	2	2	3	1-3	9	30	1.68	5.40	60	101
Storm elementals	9	9	25	2-8	8	275	4.90	1.78	10	84
Ice elementals	8	10	30	3-7	6	375	5	1.33	14	59
Energy elementals	12	8	35	4-6	8	400	5.50	1.38	12	60
Magma elementals	11	11	40	6-10	6	500	8.40	1.68	12	67
Magic elementals	15	13	75	15-25	9	800	23	3.13	4	100
Phoenixes	21	18	200	20-40	21	2000	46.50	2.33	4	186