You have to make one important decision before you start buying tools for a woodworking shop: are you going to work with rough lumber and dress it down yourself, or are you going to work with renovation centre dressed lumber. Dressed means that it is already planned smooth on all four sides. Dressing your own lumber allows you to have nicer pieces that are thicker than the mass produced standard boards, do a nicer job of planning and save some money on lumber. But we will look at the machines required to do that another time. In this show segment we decided to talk about the basic, mostly stationary machines that you will need if you are working with already dressed boards.
Of course you must start with either a table saw or a radial arm saw. You can accomplish the same things with either. If you really want to compare them you might want to check out my video on the table saw or my book on the radial arm saw, both of which are on my Stationary Saws DVD, available in the Spring of 2007.
Then still in the sawing category, the mitre box has come a long way towards replacing the radial arm saw, especially since they developed the sliding mitre boxes. If I were doing a lot of work on site installing things, I would go for the table saw and the mitre box -- and that is what most people buy. If I was going to work primarily in a small shop, doing one of a kind projects, I would opt for the radial arm saw alone. (But of course you need my book to be able to line it up dead square and cut to 124th of an inch all the time.)
If you are doing a lot of little fancy scroll cuts, you need a stationary scroll saw. Look for a strong vibration free over-arm, a sturdy foot to hold the wood down, a dust blower and an easy to change blade mechanism.
You can't have too much in the way of sanders and in addition to a portable belt sander and an orbital finishing sander, you should seriously consider a combination bench sander with a sanding disk and a belt. You will find this one of the most useful devices in the shop as you adjust mitres, knock off corners, sand things that you cannot clamp etc.
Buy fewer tools but buy quality and you will grow to love your work and be proud of your products.