I agree on the machines.... there's nothing like free weights! I picked up a flat/incline/decline bench for ~$200 and then spent $600 for Power Blocks.
http://www.powerblock.com/frame.html
I can't say enough good about them. Just one stand, one set of handles and I've got from 5 to 90 lbs. You can start with a 45 lbs set and add on. they come in 45, 90 (what I have) and 125 lbs. You can even add on bars. It tales about 2 sq. ft. of floor space. The only thing you can't do is put one between your feet for leg curls. Otherwise, wow!
I also have a swiss ball which is good for all sorts of things including several dumb bell routines.