Consider the "egg beater" style of pedal, they have more "float" than shimano SPD.
Float is the range of motion your ankle/foot can make and still be clipped on. Many
find this to be easier on their knees. Entry level pedals usually cost $50-60, shoes
probably $60-70. When you get pedals, make sure they include the cleat to connect
shoe to pedal, these are $15-20. You can often find sales with a lower price, for
example a while back I got a pair of size 50 shoes at the Louis Garneau outlet store,
they were $10. I wear a 49 or 50 shoe, really hard to find. If your first clip in set,
a good investment to have your LBS help with the set up.