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I think that all the armies are going to be playable and potentially competitive in 8th edition. That said, as a Tau player myself I have accepted that there will have to be fundamental changes to Tau lists in order to remain competitive. Things that were really strong before (like the Riptide and Stormsurge) are not nearly as good, but the humble Fire Warriors are suddenly a lot better, and even Vespid Stingwings now have a place. Many other armies are in the same boat, with lists being kind of all over the place. So, if Tau interest you, I'd suggest getting one or two Start Collecting boxes (they'll give you plenty of infantry, Crisis Suits and drones as well as a couple of Ethereals) and go to town! After you try a few games, you can figure out what else would work with your play style and plan your next purchases accordingly.
Incidentally, you mentioned conversions. I've got an acquaintance who built a beautiful Tau army made up of alien auxiliaries (various Fantasy races and others in Fire Warrior uniforms), so it really is a good concept.
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