Part of my day-to-day work is turning scanned logos into Illustrator vector images, so I've learned a few things. A few suggestions:
1) make the image that you import both Large and Toned Back (light) in photoshop with enough resolution to see detail. It will be easier to use.
2) Place your image in Illustrator, lock the layer, then do the tracing on the new layer. It's a pain when you keep dragging the image around when you want to trace it.
3) Set your pen to have a thin colored line (I use red or orange usually), rather than a fill, so you won't be blocking out the image as Illustrator tries to complete the fill as you draw. When you're done, then go ahead and set the colors the way you want.
4) When you're done, either delete your tracing image or copy everything else to a new file. Otherwise you may possibly have either a huge file and/or parts of the old image still visible. (This is one place where the locked layers come in really handy.)
Hope this helps