Odds are that it's only out of adjustment, and nothing's broken. I don't think that you'll need to spend any money on anything.

Go here:
http://www.parktool.com/

Specifically here:
http://www.parktool.com/repair/byregion.asp?catid=53

Also:
http://sheldonbrown.com/derailer-adjustment.html#front

There's a lot of info on both sites, but just focus on two things -- high-low limits, and cable tension.

I had trouble with the chain skipping gears in back because I had foolishly thrown the tension WAY out of whack. I figured it out one night, and posted about it here:
http://www.bikeforums.net/showthread.php?t=356374