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I run things much the same way ValaraukarU does, except I actually save the final file as a separate "completed encounter" portfolio so that I can refer back to what kind of shape the PCs were in after each encounter, to help in planning future encounters. If I know that I threw six skeletons at them and three of the PCs ended up nearly bleeding out, but I threw eight zombies at them before that and they breezed through the encounter, it helps me to better balance future encounters.
But to answer Geminigrey's original question, the Tactical Console will pull in every character in the portfolio when you start it. That does not mean that every character in the portfolio must participate in combat - as Aaron mentioned, you can always remove characters from the initiative order (especially useful when you have someone who has died and is no longer part of the encounter). But if you have a character in the portfolio, it WILL appear on the tactical console.
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