I believe an acrylic paint is what you want. What I did when it came up to do this job was get vinyl! This doesn't help you but my shingles were a mess when I bought the house. (I used their 'condition' as leverage when we bought the place.) Anyway, from what the rest of my neighbors tell me is that, yes, they cleaned the siding first. Then, they didn't mention anything about priming (though it does make sense but I don't know), but did say they used a 'rubbery' type of paint. It's a pain to put on, it's expensive, and you use an awful lot of it! But from their testamonies, the extra $$$ for good paint was worth it. As with any paint job, the work is in the preparation, and you shouldn't skimp on good (primer &) paint unless you're a masochist! You're doing the right thing by finding out what you should do first (prime or not, acrylic or not, etc., etc.).
I'll be reading what others may say re: your post. If you don't get an answer here, do post up on this WEB site: Ask Dr. Paint. I'm sure you'll get lots of attention there!
Best to ya and at worst, please post a follow-up as to what needs to be done so we all can learn.