You need 3 major things:
Lighting is a huge part of movies and if you get that wrong your movie is worthless. Now if you have money i would invest in a Arri light kit or go with KinoFlo. I love KinoFlo. But say you are on a budget. Easy! buy 6 dollar clamp lights and use different bulbs in them. Or search for cheap light stands, they are every where.. because it doesn't matter how you hold up a light bulb, as long as the bulb is good and you're lighting your subject, the audience can't tel if you are using 5,000 KinoFlo lights.
One thing to note is to get both regular bulbs and Day light balanced bulbs. Plus some tinted bulbs, Or buy gels to place over the bulbs. Experimenting with lighting is crucial you never know what looks good until you try it. Remember florescent are hard to mount on stands but run much cooler, and in a hot crowded set, that's a good thing.
Ok here is where you invest. If you are a beginner get a Canon HV30 and you will never look back. Ok now that that's out of the way if you are serious about making movies HD or SD is the least of your worries. Whatever you get make sure you have three crucial things:
1. A 3 sensor chip! This is a must. sub $3,000 cameras are bad, and the last thing you want is a very bad camera, save your self time and money buy a 3ccd sensor camera. It's more expensive but has greater color replication and over-all better image.
2. Manual settings, Skip the auto stuff... Go for manual zoom and focus and exposure control, don't buy anything from best buy or wal-mart go to http://www.bhphotovideo.com/ for all your needs.
3. Buy a medium in which you will be best at. You have P2 cards, memory cards, Dv tape and HDV and everything in between. Each has their up's and downs. If you want high quality stuff P2 cards can record true high definition. However DV tape when lit well looks as good as anything else.
I suggest Canon or Sony line of cameras, but i also hear very good things from Panasonic's pro cameras..
This is easy the best audio bar none comes from a good quality mic strapped to a boom pole with a blimp and a mic muff. Nothing fancy as long as the mic is good. You can get great audio from a shotgun mic from about 120 bucks and up. Don't fret nowadays cameras can record excellent sound. But if you are going all out a field recorder is what you want. Which will run you a pretty penny. But if you are serious about film making its a good investment. I mean come on! there is no excuse! get a broom pole a mic and a long XLR cable and bam! boom pole! easy.. No need to attach a shotgun mic to your cam. Ataching a shotgun mic to the cam not only yields weak audio, but also sound from handeling tha camera and noise from the camera it's self. Plus you hve to have close up shots to get decent sound. Unlike with a boom pole, which can follow the subjects around. However to make the boom pole work you need to keep it about a foot away from the actors face and about a foot and a half up (out of the camera view). Oh and don't use the on board audio for God's sake..
THE RED PROBLEM:
Ok so everybody wan'ts a Red camera or a SI MK camera. I know, but listen when will you need 2k or 4k resolution? Most indy films go straight to DVD or blue-ray. Even for a screening on a movie theater HD is just fine for most competitions. Face it You won't need anything past HD resolution. And if you do then you probably wouldn't be reading this anyways. That also goes for HD. Yes its the future but if you are starting out, SD is more than sufficient. Besides you must also think about your computer and what it can handle. So think logically before you mortgage your house, is a Red overkill when you are making youtube videos? if you say no, then you are my hero :p more power to you then..