For someone starting out... I'd recommend a Squier. They are a good solid starter guitar. It's not as expensive as a Fender, but it's not as cheap and shoddy as some other starter guitars (like mine).

As far as an amp, anything thats relatively low wattage (20W - 30W) should be decent enough for practicing on your own. Even better if it has a headphone out option for practicing late at night.

So, something like

this?

I'd recommend against a new Squier package. You will probably outgrow it quickly, and it will be worth nothing when you're done with it.

Shop around for used equipment, where the initial depreciation isn't an issue. You can often find quirky models from decent brand names for reasonable prices (I bought a slightly beatup Fender "Lead II", stratocaster style body, for $200 with hard case.)

And for the amplifier, nothing sounds warmer than an old vacuum tube amp (the dustier the better). Unfortunately old Fender amps cost a small fortune. But in the '60s many companies made small tube amps, and if they don't have the Fender emblem they won't have much value to collectors, so they'll be much cheaper.

I was in Music Go Round on Central Entrance a few months ago, and they seemed to have a decent selection of used gear-- check it out.

Here's a nifty amp:

http://cgi.ebay.com/Vintage-Silvertone-1471-TUBE-Amp_W0QQitemZ7353761489QQcategoryZ10171QQrdZ1QQcmdZViewItem

Remember, with a guitar, you really don't even need to learn a lick of music theory or notation. Though it might be wise to pick some up. I've been playing for 10 years and never learned any. Still managed to build a small following regardless. Though now I'm wishing I had learned some since lately, I've been on a real Cello fetish and keep kicking around the idea of picking one up.

for about $70, you can get an amp modeling thing you plug headphones into. You can set it to sound like a Fender Twin surf sound, or a metally Marshall and everything in-between. It's cheaper than buying an amp and a bunch of different effects pedals, and you'll get more different sounds from it.
It's also great if you're just practicing and need to be quieter. And most of the fun of playing electric guitar is the abundance of noises you can make.

I'd look for a decent used guitar. You should be able to find something for $100 - $200 at Music Go Round or somewhere else. They can also help you pick one that plays well.

The early Cramps albums are great to listen to and play along with. Most of the songs are in E, have 3 chords total (usually E, A and B) and even the guitar solos are pretty easy to figure out.

Whatever one you decide on, I strongly suggest one where the neck is comfortable in your hands. Some necks are bulky and make your hands sore trying to press the strings. It just makes learning that much harder / annoying.

I agree with Jadin's comment. If you can play around and find one that fits your hand nice. I tried a 70-something reissue stratacatser once, and it was nice. Neck was a bit smaller then my `95 deluxe and was pretty eay to navigate. I also own a `66 Gibson SG. That thing's neck is like the fat end of a baseball bat compared to my `caster. A bit harder to navigate (Though it resonates about 8 hours longer)

So yeah. Go to the local music shops and just hold a few models to see what fits well.

don't forget to learn the Holy Trinity of Rock...E, A, & B...

E-A-B-E-A-B-A-E-A-B-E-A-A!!!...Smoke On The Water, Man!

what the? I'm not even a musician...

heh, I was running through songs in my head just trying to establish notes/chords in realtion to eachother, and OF COURSE that was one of the songs

thanks for the feedback guys

the only reason I knew that is because of Kids In The Hall...

So, I ended up getting a used Cort Zenox 42

looks like this

As Otto said to Bart:
Cherry axe, dude!