Whenever you bring new fish home from the fish store, it's generally a good idea to keep them quarantined as you never know what sorts of diseases they might have come with. Quarantining the fish allows you to better monitor the new fish for potential health problems, prevents them from spreading disease to the fish you already have and allows you to better medicate them as you don't have to worry about the fish in your display tank (plus you are treating a smaller volume of water, which saves money). Your quarantine tank also makes an effective hospital tank for sick fish and doubles as an isolation tank should you need to remove a fish for any reason, from aggression issues to isolating livebearers giving birth.
1) The Tank - The tank itself doesn't have to be anything fancy. I use a plain ten gallon tank, which run $12 or so dollars. If you have bigger fish (or are planning on buying bigger fish) then you'll need a bigger tank than this. The concept of "bigger tanks are more stable than smaller ones" applies to quarantine tanks just as much as it does to your display, so if you've got the room and the funds, go ahead and get a bigger tank. I use a plain glass canopy for mine to minimize evaporation and to prevent fish from jumping.
2) The Decor - I like to keep my quarantine tank pretty bare bones. It has no substrate, which is nice because that's one less thing to worry about but also because it allows you to be sure fish are eating and to inspect their droppings for signs of internal parasites. Just to make the fish feel at home, some artificial plants are a nice touch. Since there's no substrate I use the type with the weighted base. You don't want to decorate too heavily, though, as you'll need to need the fish out and put them in their permanent homes, which is a hassle in a heavily decorated tank.
3) The Accessories - I have a plain fluorescent light that's designed to mount under a counter that just sits on top of the tank. Nothing fancy at all; I think I paid about $6 for it from Wal-Mart. I do have a really nice heater for the tank (I have a Stealth heater) as controlling temperature is important (especially if you happen to get new fish that came with a free batch of ich). I have a plain glass floating thermometer to monitor the temperature. I have two nets that I keep with the quarantine tank: one for new fish from the store and one for sick fish. I have another net for healthy fish that I keep with my regular fish supplies.
4) The Filter - This is the really important part of the quarantine tank. Whenever you're dealing with sick fish, having clean, healthy water is key in the healing process. For this reason, you never want to put sick fish into an uncycled tank. This leaves you with two options: either keep the tank set up permanently and keep it cycled, or else only set up the tank when it's needed and cycle it each time. I don't like to keep my tank up and running (and cycled) for two reasons. For one thing, you have to deal with having fish already in the tank that need to be moved out when the tank is in use for its intended purpose. Also, adding a batch of new fish to your quarantine tank is really going to tax your biological bacteria colonies, which could result in a mini-cycle. For this reason, I think the simplest option is to keep your quarantine tank's filter running on another tank and simply move it to the quarantine tank when you need it. This instantly cycles the tank. As for the filter itself, sponge filters are a good choice as they're very easy to move and provide good biological filtration without too much water movement. I personally use a Tetra power filter running only the sponge. In any case, you don't want your filter to have activated carbon as the carbon will remove medication from the water.
The total cost of all of my supplies was under $50 but the quarantine tank has already been of immeasurable help, so I can't help but recommend that you gather the supplies to set one up yourself.