Welcome FuzzMeister:
A 'down and dirty' way to find the lowest corner and to level the rest of the siding is to use a garden hose. Water will stand dead level no matter how many crooks and turns it goes through in the hose. A roll of clear tubing is easier to read than a garden hose but the hose will work.
I would not Take the old siding off unless there is some major reason to do so. You can begin by stapling the 'fan-fold' insulation board to the siding as an underlayment for the vinyl siding. I think the siding company's insturctions will be along that line.
Glenn
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