For the transition of OOC to Combat, I usually ask the player if he want the Active Power at the start. If he says yes, we put the runes in play and he wyrd minus those runes for the first round. If no, then he revert to is human form at the start of the round. This is what I rule with my player at home game. If I'm doing public game / Demo, the Active is reseted at the start of Combat and everyone start with no Active in play.
For the type of wolf, go for the flavor you like in the story. But remind the player that a wolf the size of a horse coming into town will probaly scare most people and town guard might attack and question later
