I try to not use initialization unless I have a good reason. I like to have a method that can be called at anytime to allow for the re-initialization of those global variables (as in Michael's case 3), but I would probably go further and add multiple methods for greater control over which global variables get initialized which are grouped by what the controller controls (or however one wants to group them). Then if a variable is defined within a method, but is guaranteed to have a default value based upon an initialized global variable, I will generally leave this value uninitialized as initializing this variable would serve no purpose and would confuse the reader of such code.

Being a firmware oriented person rather than a software oriented person, I take the minimalist approach, which generally means that the code has to be written tighter and highly coiled. Every line of code has to stand out and count like a move in chess.