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Hi all,
I'd start by reading the "Dwarf Cichlid Aquarium Care" section at Bob Wiltshire's (ApistoBob) excellent web site.
<http://www.dwarfcichlid.com/Aquarium_care.php>, the section on "good habitat" should answer many of your questions.
As a quick answer gravel doesn't really have a place in aquaria for Apistogramma, silica sand is what you need. Sponge filters are preferred by many people, but you can use a power filter as long as the intake is covered, and bigger is better for tank size, so many people don't go smaller than 60cm x 30cm base (height is much less relevant) but if you have a lot of cover, and are good at water management, smaller tanks can be used.