Q. What kind of paint is best to use on a wood house: Oil, latex, something else?
A. Being taught old school by my professional painter & decorator grandfather, I should say oil based paints, but I think he might even agree that modern top-quality 100% acrylic paints are the way to go nowadays. Mind you top-quality 100% acrylic paints are not cheap.
Q. What techniques are there to give the house an aged look?
A. I think you referring to the art of "Distressed" effects. Takes some practice and skill, and will most definitely add additional time and money to the project.
Q. What other important information should I know before painting a house.
A. Preparation. Preparation & preparation is everything to achieving a high quality paint job that will last for years...
For the most professional and longest lasting paint job (but will add great cost to the project), remove all paint ie Get back to bare wood, then prepare the bare wood for painting - filling cracks, holes, sanding to a smooth finish...
To save some money on the preparation stage you can leave existing paint on (but only the paint that is still well adhered to the wood). Remove all chipped, loose paint. Fill cracks and holes. Sand to a smooth finish, including the existing painted surfaces. Paint any bare wood with wood-primer...
If you encounter any damp, rotten, etc wood during the preparation stage, I highly recommend removing it. When doing so, cut 150mm (6inch) past the last sign of damage ie Get back to good, solid wood. Preferably re-patch with the same wood species.
I would recommend something that is dimensionally stable, resistant to rot and easy to work, like cherry, chestnut or walnut - for an outdoor food preparation surface, any tight-grained hardwood will work. (See also the "Wood Picker" app)
Fine woodwork that's meant to be kept exposed to the elements should be protected with a marine-grade spar varnish. This requires a bit more effort and care to apply, and will require periodic maintenance - google "brightwork", which is the art of applying finish to wooden structures on boats. There have been entire books written on the topic, but here's an article to get you started.
Best Answer
Generally you want to treat exterior wood like this with a water-proofing treatment at least once a year. It helps to provide UV resistance and keep water out.
Water is your big enemy here. It looks like the wood was installed with some lacquer for waterproofing (hard to tell from the photo), but it's worn away. You've got a couple of options
Paint it
Paint will waterproof and make it look nice and uniform again. It sounds like you want the wood look, but as far as options go, this one is the easiest and had the fewest questions on maintenance. I mention it for completeness.
Stain and waterproof
I'm assuming you just want to work on the greyed spots. This is trickier because matching stain is difficult. Just like painting, your best bet is to stain the whole thing. The next best option is to find a stain that's close enough. Because you have a natural break in the soffit and wall, a close enough color might do the trick, and people will assume the wall just looks different due to lighting.
Then you'll want to waterproof it. This isn't a "one-and-done" either. Your wood will grey over time. The more often you waterproof it, the longer it will stay the same color. Waterproofing also helps prevent the boards from warping and splitting over time (water is your enemy there).