I'm not Mormon, but I grew up in Utah and learned a bit of what they believe so...
I think that if Mormons believe God has a physical body, it's because he was a "human" on another planet, then ascended and became God of this planet (correct me if I'm wrong).
As for the incarnation, I believe the Mormon church teaches that God has a lot of "spirit children" and that when we are born, one of those spirits waiting up in heaven for a body gets one, and Jesus was the first "spirit child", even though he wasn't the first to receive a physical body. Or something like that?