when do I need to start looking?
I would start looking July/August, about 3 months before you want them to start. Bear in mind that September is the month when lots of nannies/nanny jobs come up (because of children starting school), so you may find it a bit slim pickings looking in Oct/Nov. Having said that, nanny jobs are few and far between at the moment, so possibly not going to be an issue this Oct/Nov!
is it likely to be easier to find someone live out or live in?
Probably easier to find someone live-out. The benefits of live-in are longer hours/babysits/overnights if you need any of those and a bit of saving on costs.
how do nanny shares work - do I find the nanny first, or the other family first?
Up to you. If you can afford to pay the nanny by yourself for a bit then find the nanny first. That way you can pick exactly who you want without having to compromise with another family. If you can't afford a nanny by yourself, find the other family first. If you want to save the hassle of finding/interviewing a nanny, look for a family who have already recruited one. You can have a look on thenannysharers.co.uk and nannyshare.co.uk to find other families/families with nannies.
how much does it add to the cost to use an agency?
It varies, but agency fees can be huge. Ring a few agencies and ask them.
what are 'normal' nanny hours and how difficult is it to find someone to work longer hours.
Normal hours for live-out nannies are 8am-6pm. Many start earlier or later, but you'll struggle to find someone who wants to start earlier and finish later than that.
Live-in nannies typically work an 11/12 hour day so 7/7:30am - 7/7:30pm, plus one or two babysits a week inclusive.