Oi barbaroi

Sooner or later, you have to deal with the Greeks.
I guess Aeschylus's Persians and Herodotus' Histories are a good starting point.

This seems to be a rather relevant bibliography (I took it from Johannes Haubold's website, at Durham University):

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General:
P. Cartledge, The Greeks: a portrait of self and others, Oxford 1997 [introductory]
P. Dubois, Centaurs and Amazons, Ann Arbor 1984 [on defining oppositions such as free-slave, man-woman, Greek-barbarian]
P. Georges, Barbarian Asia and the Greek experience, Baltimore 1994 [broader in scope than Hall; tries to take account of non-Greeks' views of themselves]
E. Hall, Inventing the barbarian: Greek self-definition through tragedy, Oxford 1989 [standard account of Greek/Athenian discourse of the barbarian]

Aeschylus, Persians
E. Hall, Inventing the barbarian: Greek self-definition through tragedy, Oxford 1989 [ch. 2]
E. Hall, Aeschylus: Persians, Warminster 1996 [read the introduction]
S. Goldhill, 'Battle narrative and politics in Aeschylus' Persae', JHS 108, 189-93 [discusses some of the relevant issues]
T. Harrison, The emptiness of Asia: Aeschylus' Persians and the history of the fifth Century, London 2000 [argues for an unsympathetic depiction of the Persians]
C. Pelling, 'Aeschylus' Persae and history', in C. Pelling, ed., Greek tragedy and the historian, Oxford 1997, ch. 1 [argues that Persians could have instilled sympathy with the defeated enemy]

Herodotus, Histories
J. Gould, Herodotus, Bristol 2000 [standard introduction]
T. Harrison, Divinity and history: the religion of Herodotus, Oxford 2000 [on Herodotus' views of the divine]
F. Hartog, The mirror of Herodotus: the representation of the other in the writing of history, Berkeley 1988 [influential study of Herodotus' construction of cultural difference]
J. Moles, 'Herodotus warns the Athenians', Leeds International Latin Seminar 9 (1996), 259-84 [on the fickleness of prosperity in Herodotus]
R. Thomas, Herodotus in context: ethnography, science and the art of persuasion, Cambridge 2000 [ch. 4 has a nuanced discussion of Herodotus' views on custom and ethnicity]