The question for the GM becomes one of information flow. Just how much knowledge should the players have about their starting locale? Especially in a sandbox style campaign, starting the players with zero or next-to-no information means they are going to be flailing about blindly, with no way to make an informed choice about where to go first. This can be frustrating to both players and the GM; the players because they feel completely helpless, and the GM because they players are more than likely not going to randomly stumble on the neat things he has carefully designed for them to encounter.
Starting the players with little or no information can be difficult to justify in-game as well. If the player characters have grown up in a particular village, why don’t they know the layout? The prominent NPCs? The fact that there’s a ruined tower just over the ridge to the north? The name of the king?
In the original DMG, Gary Gygax gave some excellent advice on the subject:
As background you inform them (the players) that they are from some nearby place where they were apprentices learning their respective professions, that they met by chance in an inn or tavern and resolved to journey together to seek their fortunes in the dangerous environment, and that, beyond the knowledge common to the area (speech, alignments, races, and the like), they know nothing of the world. Placing these new participants in a small setlement means that you need do only minimal work describing the place and its inhabitants. — A&D Dungeon Masters Guide, p. 87
This setup neatly solves the problem of the player characters not knowing much detail about their starting point; since they come from a “nearby place” they could very well not know anything about the actual starting village or town.
The question still remains of just how much information should be given, and how. Do you, as the game master, prepare a handout, complete with rumors, maps, and lists of deities from which to choose? Or do you more severely limit the information available to them, dictating that “there was only one temple in the village you grew up in, and so Thor’s your deity”?
I don’t think that generosity with information concerning some of the broader brush-strokes of the campaign is a bad thing. As a matter of fact, I think that the players can find themselves more invested in a setting about which they have some knowledge, rather than the whole being a gray and misty cipher beyond the 10-mile-radius around their immediate starting locale. Does having the World of Greyhawk maps hanging on your wall ruin the mystique of having a campaign set in the Flanaess? If not, then how does handing a continent-scale map of your homebrew campaign do so? I don’t ask this with any specific answer in mind, but invite speculation and discussion in the comments.
Personally, I find the campaign really gets going after the third or fourth session, when the players have a good sense of who’s who, what a few of the plots are that are happening in the campaign (at least in their little corner of it), and so forth. I’m wondering if there’s a way to jump to that point without simply handing the players a list of rumors and NPCs, which feels less than right to me somehow.