When dd started piano, I first called everyone I could find who taught (schools, individuals) and asked about their methods. I let them do the talking. Some were very good explaining their background, how they taught and why they used that method. Then, I visited the ones that I thought sounded best over the phone and chose from there. I love our teacher. She runs a school that is only for music learning. There aren't any sales dept. She keeps several teachers for several instruments and is extremely positive. My dd started at 6 yr and our teacher uses a group arrangement for that age (4/class). They don't share a piano though--there are 4 pianos in that room, all very high quality digital pianos (not keyboards). They have headsets for when they are all working on something. The class also learns music theory as well as 'how to play'. They have opportunities to compose as well. The piano hook up to computers and that has been a great way to learn to read music as well as other benefits. Also, the kids get to make CDs of themselves playing. Our teacher rewards the students with 'credits' that they can use once a month in her "store". This store is for credits only. It really seems to work as my dd practices without me harping on her. I was hesitant about the group thing, but I really think it is best for dd. She loves her classmates, and they help each other figure things out. Plus, they play "games" in the music theory part which they couldn't do in private lessons.
As far as buying a piano, our teacher hooked us up with a digital piano for around 2000 new. She thought the quality of it was great, but it doesn't have the features of the higher end models. We love it. DD can use headphones if we need her too, and it never needs to be tuned. To get similar quality on an acoustic piano we would've needed to spend a lot more.
Amy