If the stockinette is on the inside then yes, you're knitting it inside out. You can just flip it right side out when you're done if you don't want to frog it and start over.
Here's the "correct" way to hold the needles when knitting in the round. Knitting it inside out is not really incorrect though..it's just different.
You can see in the first group of pictures that the points of the needles are closest to you..the loop is away from you.
The answer to your very first question is 'it doesn't matter' with ribbing. Start when your ready.