+1 used. Find an old good bike for $400-$500. Learn to work on it yourself. You can get used clothes at a bike swap, or just get the cheap Nashbar shorts (they're fine -- I have $120 shorts and $20 Nashbar shorts and don't prefer one over the other for any reason). Get a couple out-of season clearance jerseys. Find old used Sidis on ebay or craigslist (try on locally at a shop for size), as good shoes last 10 years or more.
Ask around a local club (maybe join up for ~$40 annually) and ask if anyone has old helmets and gear they'd sell to you for cheap. I still have my last three helmets, and they just need pads (use weather stripping from Home Depot). Get the $12 Performance gloves, they're the most comfortable I've ever worn, and have tons of terry on them for sweat wiping. Get cheap socks at target (short and thin). Pedros water bottle and "Milk-cage" combos are awesome (~$6, and it's one of the lightest cages made -- from recycled milk jugs -- mine have lasted me 6 years so far).