| I regularly host a 50¢/$1 Kill limit HE game with standard betting structure (25¢/50¢ blinds, 50¢ bet P/F, $1 bet T/R, 4 bet cap per round). Most of my players are newbies and are more comfortable only buying-in a small amount at a time, so I tell them $10 is the minimum, but $20 is the recommended buy-in. Last game I had 9 players and everyone bought in for $20. I gave each player 20 25¢ chips (green JBs) and 15 $1 chips (black JBs). Rebuys I either gave out the same distribution, or all $1 chips (I have a lot of $1 chips), since there were enough 25¢ chips in circulation for them to make change. Everything went smoothly, and the $20 buy-in seemed to be the right comfort level for the players, too.
My recommendation for a smooth cash game is to use as few colors as possible and to give out as many of the lowest denom chips as you have first, because you then have less need for change-making and an easier time pot-splitting (ideally, if you had enough chips you could give out only a single denom like in the card clubs). Plus, everyone feels good with a big mess o' chips in front of them.
Don't micromanage the change-making--you have enough other things to worry about. The players will handle it automatically, unless they have serious issues with simple arithmetic. Once all the small change is out, you use the bigger denom chips for rebuys, and the players can easily make change amongst themselves. Just give the guy 4 $5 chips for his rebuy, and trust that he will figure out what to do with them on his own.
So if you have 10 players, $20 buy-in, and a 500-chip set with 200 25¢, 200 $1, and 100 $5: give each player 20 25¢ and 15 $1 to start, and then start using up the rest of the $1 and then the $5 for rebuys as the game goes on.
Also, if your players are newbies, I advise against playing cash no-limit, unless they don't mind tremendous swings in their bankroll. But since straight limit seems a bit dull at 50¢/$1, I recommend making it a Kill game--it adds just the right amount of excitement, I think, without overextending the newbies. The only downside is that you'll need a Kill button, and it adds a bit more complexity to the rules.
Just remember to go to the bank and get a bunch of $1 and $5 bills for cashing people out, because everyone only brings $20 bills.  | 
