What concerns should I have with the wood?
If it came from a shop, the only issues to be aware of are ones you've already seen: the leaching of tannins from the wood, staining the water. This also can lower the PH of the water a bit, but considering how high your tap water PH is I wouldn't be too worried about that.
If the driftwood is of a manageable size, one thing you can do with it to eliminate/reduce the tannins it leaches is to put it in a pot and boil it for a few hours. Another thing would be to sit in a bucket for a few weeks, allowing it time to leach a lot of material out before introducing it into the tank.
Activated carbon will help to reduce the browning of the tank's water.
It'll sink on it's own, eventually. How long it will take depends on the size, shape and type of wood.
With the drift wood can I keep cichlids?
Well, the thing is, there are hundreds if not thousands of species of cichlid, coming from pretty much every sort of region and water parameters out there. The needs of a south american dwarf cichlid will be considerably different from those of an african cichlid from the rift lakes. So it's usually impossible to generalize without having a clearer idea of just which cichlids you mean to keep.
However, in this case, it's safe to say that driftwood should be no problem for anything you plan to keep. It has a slight tendency to depress PH, but that can be compensated for if need be and it has no other effects.
If cichlids are ok what water additives should I use with them?
Depends. What kind of cichlids?
What type of fish should I avoid with the driftwood?
None really, that's pretty much a non-issue. On a thematic level driftwood would be out of place if you're going to try to mimic certain natural biotopes, but that's about the only reason I can think of why it would ever be an issue.
What type of water tests will I need with freshwater?
Based on your second post, I'd say you pretty much have what you need.
What will I need to do when I start using RODI water?
Partly this is going to depend on what you plan to keep, but odds are you're pretty much going to have to remineralize it with an additive. I've no idea what the german products for this purpose are called, but they shouldn't be hard to find.
I have an old overflow box and items needed to build a wet dry system including the pump would you ditch the power filter?
Honestly? Depends on what you're going to keep
If the tank will end up being full of a couple harems of apistogramma, I wouldn't bother with the wet/dry. If it's going to be a very highly stocked african rift lake tank, a wet/dry would probably be very helpful.