Play all sorts of guitars. Find one that plays well and sounds good--to you. These recommendations have all been for good guitars, but a guitar is a completely personal preference. For instance, I hate Fenders. I don't like the way they play, and I dont like they way they sound. That isnt to say that it isnt a good guitar--some of the guitar greats played Strats (SRV, Clapton, Hendrix, for starters), I just dont like them. I prefer a fatter neck, with a thicker, fatter sound--and I found the Les Paul was pretty much exactly what I wanted.
My point is this--play around. You won't know what to get, what you feel best playing, what sounds best to you, until you do. And even after you decide which model to get, play with different guitars in that model--there can be significant differences in playability between seemingly identical instruments.
As for an amp, my first was a Fender Frontman 25R. Nothing fancy, but it is small enough to practice with and jam with in the house, but still can cut through and be heard when playing with others. I dont remember how much it cost, but it wasnt more than $150.
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"Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws."
--Plato
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