1. How early do you start installing defence bases?
When I first started playing DW I often built defensive bases around my home world - usually 2 or 3. Now I don't do that anymore and rely on mobile defensive fleets. That way I can advance these fleets closer to the front lines as my empire expands. With a large empire in the later game, it isn't necessary to have a large military presence far back toward the center - just a few emergency skirmishers is usually sufficient.
Personally, I think it's best to not build any military ships or bases until I've at least researched some decent weapons, so I usually research for a few years before I build anything military.
2. Do you install on every station you have and if so do you adjust firepower/armour/Shields for each and every place you put them depending on what you are defending?
I certainly don't put defense bases on everything. Some colonies or mining stations are simply not worth defending. The one place I might build a defense base is to protect my research stations. They never move, I don't arm them, and my scientists are too valuable to lose.
Or perhaps you're asking if I put weapons on all my base structures?
The answer to that is "no". I put weapons on defensive bases and some space port designs - period. This leaves more room on the other structures (research stations, mining stations, etc.) for more of the stuff they need to do their job and I rely on small fleets to protect them.
I put some weapons on small space ports because they are often near the front, but I want to get them up and running as soon as possible so I don't put too many.
I put lots of weapons on large space ports because I build them in hot combat zones to refuel my battle fleets.
I put minimal or no weapons on my medium bases because I keep that design for my colonies at the back of my empire. These colonies are far from the front line so the space port's job is simply to collect resources from traders and build warships that then travel to the front lines. When my front line advances I "upgrade" my large ports to medium ones.
When I build defensive bases I have just one design. I don't adjust firepower/armor/shields or anything else because it's too fiddly. When I upgrade my design for defensive bases I want to be able to go into the menu and just tell them all to upgrade to the latest design. I don't want to look at each base and make a decision. Keep it simple - it really pays off in the later game.
3. How early do I need Military ships? I'm paying 800 creds to pirates every mth to keep them from destroying things, which isnt much baring in mind what my income is, but I would still rather not pay them. Should I wait until I'm strong enough to fight them?
I research some decent weapons before building military ships (see above).
The pirates are very powerful relative to you at the beginning so pay them off until you know you can push them back. If you attack them too soon they will harass you constantly and you'll spread yourself too thin trying to defend all your mining stations when you should be concentrating on building up your economy.
Note: Don't listen to your advisors when they say you should cancel the treaty with the pirates. They usually start complaining about this long before you're powerful enough to fight the pirates. If you cancel the protection money the pirates will come knocking.
I've discovered that the amount of protection money pirates charge is dependent on your income at the time the pirates first offer protection. If you drop your income as low as possible by building things that require maintenance early on (e.g. research bases, construction ships, etc.), your protection bill will be lower. Once that's established you can scale back the construction, raise your income, and continue paying the lower rate indefinitely. It saves a few bucks in the long run.
Note: Income and cash balance are not the same thing. Your cash on hand has no impact of the amount they charge.