My first, and current, electric, is an Aslin Dane SC, which I bought at a steal - A$150! - from my teacher; my amp is a 15-watt Samick that I used to use for my bass guitar. It's pretty cheap gear, but it's functional, which is the most important thing. Besides, playing on a dodgy guitar has done great things for my finger strength and articulacy, and having a small amp has taught me to make do with minimal tonal versatility. I've decided that only when I get into a band will I treat myself to a nice Ibanez guitar and a Line 6 Amp.

So basically, your beginners' gear doesn't have to be fancy - just comfortable and functional. :)