Though relatively expensive, braided stainless steel over teflon brake lines really are the way to go. Aviation brake systems use petroleum based brake fluid, auto systems do not. The two should NOT be mixed. That said, upgrading to the newer synthetic MIL-H-83282 fluid is a good idea. If you use the stainless/teflon lines and put in the above fluid you will not likeloy have to touch it for years to come. More info on the difference in the two aviation brake fluids here. And yes, ATF can be substituted.

I know Brett is working on a kit for the Kitfox, in the mean time just measure the pieces you need and he'll make 'em up.