I've built quite a few rods now, and find that had I picked up a really good book on the subject first I think that my first few rods would have looked quite a bit nicer. Can't think of the name of the one I picked up recently, but having read it from cover to cover I learned a lot that would have been of great help. I'll look for it when I get home.
Basic equipment you'll need is some sort of rod-turning apparatus, a thread-tensioner (both of these can be "home-made" if you want to go for the ultimate basic set up, or can be top-of-the-line store-bought), and the raw materials (blank, handle components, reel seat, wrapping thread, color preserver (depending upon thread type) guides, tip, and rod finish). Other items needed are basic, such as a sharp knife (i.e. exacto). Don't think I left anything out.
I really enjoy building fly rods, hoping to build a nice 5-wt. this Spring for my grandfather for Father's Day. I generally use St. Croix or G. Loomis blanks, Pacific Bay componenents, Gudebrod wrapping thread, and Flex-Coat finish. I buy most of this at Cabela's on line, simply because we don't have a local retailer that carries rod-building supplies. It's nice to be able to build the equivalent of a $400+ rod for less than $150.