The New Complete Joy of Homebrewing.
Read the first 3-4 chapters before buying anything else.
Definitely make your first batches from extract.
A starter kit costs under $100, and typically contains:
- 7.5-gallon plastic primary fermenter with lid
- 5-gallon glass carboy for secondary fermenter
- drilled stoppers and airlock
- hydrometer
- Racking cane, siphon hose, and bottle filling tip
- bottle capper
- bottle brush
In addition to that, you will need (available from homebrew store)
- 2 24-count cases of 12-oz brown bottles (don't bother with clear or green) plus 6 more bottles (a 5-gallon batch typically fills about 53 bottles)
- bottle caps
- iodophor for sanitizing
- PBW or similar product for cleaning fermenters and bottles
- 3-gallon pot
- large stainless steel spoon for stirring pot contents
As for your first batch of beer, I would recommend a pale ale, brown ale, porter, or hefeweizen.
Don't use the dried beer yeast. Get a liquid yeast (White Labs or Wyeast) appropriate for the style.
The extract method typically has you bring 2 gallons of water to a boil, then remove from heat and add malt extract and hops, stir til dissolved, and return to heat, and boil for an hour. Then you pour 3 gallons of cold water into your plastic primary fermenter, and pour the concentrated wort into that. One problem is that this tends to cause the beer to be very dark, and sometimes a little caramelised. Also, the hops don't get properly utilised in such a high-sugar environment.
For extract brews, I recommend adding a third less hops, and boil the hops only for 40-45 minutes. Then add the malt extract for only the last 15-20 minutes of the boil.
Also, with extract brews, if you don't want them to taste thin, make sure you use specialty grains like crystal malt. Papazian's book will tell you what to do with them.
If making a pale ale for your first beer, make sure you buy additional aroma hops to use as dry hops (added to secondary to impart lots of floral hop flavor and aroma).
Pay LOTS of attention to sanitation. Biggest mistake by beginners is skimping here.
Spend some time talking with the employees at your local homebrew shop. I guarantee they're all homebrewers themselves, and will have lots of advice. See if there is a homebrew club in your area, and go to some of their meetings.
Where are you located? I can tell you if there is an active HB club near you.
Also, check this out:
http://forum.northernbrewer.com/And remember:
Relax, don't worry, and have a homebrew!