Well, I never managed to explicitely state it, though we may find out more in later chapters.  The first years were actually from all four houses. It doesn't really matter to Harry; as far as he's concerned those that bully ickle firsties are scum.  After all, first years can't defend themselves.

 As for Draco and Co, I'm not exactly sure why they decided to play with the children.  I suspect it has something to do with the fact that a Slytherin was playing with Mudbloods from different Houses, but the Junior Death Eaters aren't talking to me.  I have no intention of reforming Draco, BTW.  He's a spoilt brat and a bully--much of what Professor Snape has always thought Harry was.  (The irony of his favorite student being exactly what he has accused Harry of is not lost on me.)

 Snape hasn't quite managed to justify what he's doing to himself yet.  He's lumping it all under keeping his promise to Lily.  If asked, he still claims to not like Harry at all.  We'll have to wait and see how far he's willing to go... <eg>

 I'm happy that you're enjoying this, and an update will be coming fairly soon.