Moved from the Creative Cloud to the Illustrator forum. They will be able to help you here.
Live Trace in a pain in the rear end compared with Streamline.
Streamline produced orderly stacks whereas Live Trace produces compound paths that are difficult to edit.
Start off by tracing with Ignore White checked.
This should give you a single set of paths as opposed to the duplicate paths you get when Ignore White is unchecked.
When you have expanded the trace, release compounds. Everything will go black. Don’t panic.
Ungroup and send the outermost path to the back (bottom of the stack) and colour it pink-or-something.
Now set about colouring everything else.
Check that you have got everything by turning off the preview. There may be bits behind other bits that should be in front of them.
Live Trace can produce illogical stacking when compounds are released - you have been warned!
Image Trace in CS6 is rewritten and not the same as Live Trace in earlier versions. They are essentially two different features which perform similar tasks, but they aren't the same.