UPDATE:
I probably had not moved all of the utils and folders into the EQ directory and that may have been why the chars were not spawning with items. (prays his DB is still good)
They're still starting out in halas/kaladim, but it may be because I'm using titanium vanilla client?
Additionally, I recommend that anyone setting up a server also use this guide:
http://www.eqemulator.org/forums/showthread.php?t=32980
because the new setup requires specific files to be in the server directory, like perl scripts and things.