I've had a number of customers ask for hand polishing only, actually. It's quite possible to sell hand only work as a niche, as many owners have seen what their car looks like after hack work with only a wool pad and compound, and automatically assume that all machine polishing is bad. Although these people are misinformed, you can definetly capitalize on that.
As far as insurance, OSHA, etc, goes, you can get away without it for a couple years. Don't ask me how I know

. Same with power, water, etc, I did quite well over the summer and I just worked out of my GTP without bringing my own water and power.
If you're going to get into polishing, I'd highly reccomend a Cyclo. I ran one for several months before I bought a rotary, and I still use it today on sensitive jobs and for finishing polishing. It's not a cheap machine, but it's MUCH faster than a PC, and it's basically impossible to ruin a paintjob with.
Brad, do you go to UF? I go to FIT down in Melbourne, and I brought all my equipment with me, so might be able to hook up some training or something.
-Tim