Hi,
  I've developed an RPG with two others, and we are trying to figure out how to proceed with publishing.  I currently have my own publishing company which I use to self-publish music I've composed and recorded.  However, I've been advised to start up a separate company to publish the RPG under, because it is unrelated to the products my current company publishes.  I'm really not sure of the best way to proceed with this, but here are our goals:

  We intend to release our RPG first on RPGNow.com
  We then plan to run a small number of printed books which we'll sell at a local gamestore (already made arrangements with the owner)
  Depending on the game's reception, we may then plan to try creating more interest through Cons and other advertising
  We are currently considering self-publishing options like Amazon offers, or Lulu
  If things continue to look positive, we'll print larger runs of the books and pursue wider distribution

    This is very different from the music industry I'm involved with, so I'd really appreciate advice from anyone who has experience in these areas. 
    Thanks,
    Andy

   

That sounds like a relatively wise course of action, lower risk and likely to build a good support network in your local community. 

  My recommendation is that you use that initial first print run via Lulu for your 1st edition version.  You likely will not have that many sales numerically, but those will give you priceless feedback which you will be able to incorporate in a new 2nd edition version done via larger print runs.  You could offer a free upgrade to the relatively few 1st ed customers if you wanted.  You can then investigate options for distribution such as Indie Press Revolution (IPR).

Best of luck!