For now, I have a possible situation where I can work full time and then also work part-time probably on a contractor basis (not sure) for another company.
What do I need to know about this? What are the legal considerations? How do taxes work? Lifestyle stuff I should worry about?
Do you have any war stories about this kind of thing?
Taxes are usually done after the fact. I.e you get a 1099-MISC from each person who has paid you, and you are liable for that.
Speaking of payment, learn to be a squeaky wheel about it straight off the bat. Freelancing is notoriously inconsistent, expect 60 day swings between receiving payment. DONT BILL BY THE HOUR. There's plenty of reasons why online.
Lifestyle-wise, figure out a way to be productive. You have to enforce accountability in yourself, you don't have a boss or a team counting on you. It doesn't matter when you work, you don't need to show up 9-5, you just have to get your shit done.
Make sure you set your hours (preferable a week in advance) and follow them. For example, if you work 9am-5pm Mon-Fri, set 6pm-9pm (an example) Mon-Fri and 11am-4pm on weekends for freelancing projects. In addition, realize that a freelancer is always thinking about his/her business, so you will 'always' be working. You will be emailing clients, marketing yourself, and building your brand at all times.
Legal
Consult a few lawyers for about 30-60mins each (they usually offer this for free) about your situation. You are essentially interviewing them at this point, and finding the right one. If you don't feel quite right, move on. They should be able to accurately explain the answers to your questions thoroughly. Taxes, incorporation, setting up contracts, etc. should all be covered.
Also, they should be able to tell you what their fees are!
Money
Watch this: http://vimeo.com/22053820
"F*ck You. Pay Me." is a talk about how to make sure you're getting payed what you are owed as a freelancer. The speaker's lawyer comes up and also gives fantastic advice.
Contrary to popular advice I billed per hour.
Don't do any contracting work at your job and you should be fine legally. Don't tell anybody you are working on the side though. Raises eyebrows you don't need raised.
Best tip: Find businesses that actually need a problem to be solved and not somebody that just has a budget.
They'll appreciate you more, pay faster and generally love all over you if you let them.
Companies with budgets to spend but no pressing problems to solve are a real pain.