Sorry this is long, and a little presumptuous. If this comes off as a ramble, please disregard.
I think you can get away with 8 or even 10 refresh characters and still maintain "newness" about the setting. Although you may find you're handing out more information to successful Lore or other knowledge checks (since the PC's might know more about the setting than the players actually do). It sounds like your players are looking at the supernatural powers as more of a shopping list than a list of character options with pros/cons. You know your group best, but I would try to impress the idea that supernatural power in this game causes a loss of fate points, and, in story terms, their free will. Maintaining humanity (weaknesses included) is a major theme of the setting. As soon as they "succeed" in becoming an uber powerful supernatural, the character is in negative refresh. It can be a difficult task to get in to the mindset that PCs are not the superpowered beings that they are in many other RPGs. It may help if everyone approach it as though they are intended to be the underdogs, and that is what makes them better than the monsters they face. If you or they have any experience with Hunter or Call of Cthulhu, think that style of underdog.
As far as milestones go, I am again blessed with a group that is tolerant of ad hoc experience rewards. I expect that Minor and Significant Milestones will be about as frequent as the books suggest, but Major Milestones will be given at times that are appropriate to support the dramatic flow of the game. I'm envisioning awarding a Major milestone just before the "final showdown" with a bad guy, or perhaps just after they defeat a significant Lieutenant or "right hand" of the big Bad. This way, it's both appropriate for them to advance their supernatural power slightly, and they can immediately bring it to bear against an enemy that used to be too "big" for them (and, with any luck, thoroughly deserves the PCs wrath)!
Starting at a low refresh has the additional benefit of seeing characters grow quite a bit without becoming so powerful as to sunder the planet. If players are digging the game, you can continue giving them boosts at a decent pace without having to scale up the opposition to ridiculous levels. Mind you, those types of godlike enemies can be great, but this is the case, IMO, because of what I was saying about being the underdog!
No worries digital3lf; this is not very long (I'm prone to rambles, so I'm used to longer posts), nor is it very presumptuous. If anything, it's a nice view and something I needed to see.
My players and I have often been at odds with how games "should" be played. I like the idea of "growing" into something (i.e. I'd personally start off with a concept like "ThreEye Junkie turned Sorcerer" as per an idea I had recently, or a skeptic with the Aspect "A Little Close to the Truth" to get started) and then going from there, while they dislike starting off with "farmer's stats" (a term so endearingly started in a D&D session). I know I'd lose quite a few potential players by keeping them in the dark and starting them off as Vanilla Mortals. . .although the idea of Changelings, Minor Talents and Focused Practitioners might be rather fun. . .
I am familiar with Hunter (Hunter's Hunted, Hunter the Reckoning, and did some light reading on Hunter: The Vigil), and I enjoyed being the underdog. Never had a chance to play CoC, but I know you will "lose" at some point, which is fitting for Lovecraft.
Sadly, my players aren't keen on this either, so we're back at square one.
Anyway, onto greener pastures. . .
With what you are doing here, are you starting everyone off as a Vanilla Mortal that comes into something else (Sponsored magic, Red Court Infectee, learn to be a Wizard, etc), as a "minor player" in the Supernatural community that just gets better (kind of like The Alphas), or are you using and entirely different approach?
I do agree that it is a great theme of holding onto your humanity/free will when it comes to Refresh, I'm not entirely certain how many people will see it as such. When I mentioned the game to a friend, he already started to figure out how he was going to have a White Court Vampire who could incite emotions from a range and have more than one. This was all before I even mentioned the power level I was thinking of using, which does show me what I'd need to at least consider for running the game here.
Overall, I like your idea, and with the right group I can REALLY see it working. At the moment, I'm not able to bank heavily into it, but I will be keeping it in mind, so thank you for that.