4E rule books

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I am getting back into D&D after years away.  I am teaching the game to my kids and the different 4E rules are making me a bit crazy.  I'm sure there are previous posts on this but Iwanted to get a recent opinion on the different rule books.  I started with the soft cover books like the compendiums and the new boxed sets.  I just picked up the core players handbook and there are big differences...for example the half elf granted race power.  What do you recommend?  Which should I use for the players?
The Essentials books contain the most up to date rules.
What do you recommend?

I personally recommend getting a DDI membership (even a short term one if need be) in order to use the Character Builder. It can be an excellent time saver, and can bypass the need for many player books.

Actually, you can use either version. A half-elf get to choose whether to take Knack for Success or Dilettante. Using only the Essential line books won't let you find very many options for Dilettante, though. Same thing with humans, choose Human Effort or an extra at-will attack power from your class.
If you want core gameplay rules, the Rules Compendium is the most important book, as it includes the many errata that were made to rules in the PHB1 and DMG1. Beyond that, the other books mostly serve as reference for classes contained within them and magic items, but you'll always want to check online for errata.  A lot of the material from the original PHB has changed, in particular how daily powers on magic items are used, stealth/hidden rules, and a lot of feats were modified or extended in other books with variations to resolve balancing issues in the math - that's where all the expertise and focus feats come in.
Welcome back to D&D, Sparky.

Both sets of books are good and can be used together in any game.  Classes from both books can play side by side in the same game.  The Rules Compendium is the most up to date RULES, so it's good that you have that.  For game elements such as races, classes, feats, powers, etc., you can use either book.  The PHBs have one way or making characters with its own builds and the Heroes Of books have more streamlined, simplified character builds.

Since you're just getting back into things, however, I would recommend using either JUST the PHBs for your character or JUST the Heroes Of books for your character.  You can mix and match game elements from both but the guidelines for that are not totally apparent, not super quick to explain, and require a little research in the rules errata/updates on this site.  (Look for the Complied Updates document for all the latest updates - there are a LOT since the first PHB was printed in 2008.)

So until you wrap your head around the new game, I would advise you to just stick to one or the other for a little while instead of trying to mix game elements from both.

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