Unless you are selecting the "Randomize Opponents" option, you can just refrain from selecting the Resistance/Empire as a civ that will play in the game. If you do have it on random, you won't be able to stop the possibility of both of them appearing, unless you permanently delete one of the two races.

What you're seeing happen will happen with any civ you do this to. Even though you didn't click the custom race's portrait, you still created your own custom race, and that's why the game is seeing them as two different civs, which they technically are, since you changed some things.

Correct. The name has to be changed in order for the game to recognize it as a raceconfig.xml file.

Okay, go to "Owner\Documents\My Games\*Version of GC2 You Want to Edit*", then scroll down until you see a file that says "Altarian Empire." It's a raceconfig.xml file. Just right-click the file, scroll down on the pop-up menu, and hit "Delete." That should do the trick, but to be on the safe side, start a new game as a generic civ, then quit the game right after it is done loading, then perform all the instructions I just listed.

If you need anymore help, feel free to ask.

In relation to a discussion we had the other day in another thread about the fact that the Altarians are practically defeated in the story in DL, the remnants thereof comprise the Altarian Resistance, as opposed to the Altarian Republic.

Granted, the backstory in Brad's posts and in various other places on the site provide more information than the game does, oddly enough (from memory-it's been ages since I played the campaign).

However, my guess is Netro Mancer is among those who perished.

As for why SD did it...Brad did it.  It's his story.  SD is his company, certainly, but I'd make a distinction between something SD does and the story Brad is telling.