Video & Audio Kit on a Budget
On the audio side, I've been extremely happy with my Sony M10. It takes two batteries and MicroSDHC cards. With a pair of fully-charged eneloops, it can fill up a 16GB card and the 4GB internal memory at 24/44.1 and still have some power left. Audio quality is good, but the close-set omnis don't give you a lot of stereo separation. You will also need to manually sync your audio with your camera.

Given your budget, does it make more sense to rent gear than purchase?