My workshop is a spacious 2 car garage in Boulder, Colorado at the base of the rocky mountains. I put together a wood workbench with a shelf below for holding tools. The previous owners of the house installed old cabinets all over the garage so there is plently of space to keep everything. There's also a lot of pegboard, providing hooks to organize tools conveniently.
After getting my garage cleaned out a little bit (it's still a mess) and the workbench built, I purchased a compressor. I got a Craftsman 33 gal 5 HP 150 PSI max side standing oilless compressor from Sears for $275. My preference would have been for an oil compressor, but they were all significantly more expensive and lacked all the features. An oil compressor runs quieter and has a much longer service life, but requires regular maintenence. The Craftsman will put out 8.6 SCFM at 40 PSI, which is not quite enough to drive an HVLP paint sprayer for priming. They typically require within the 11-13 SCFM range. A touch-up gun may be good enough for priming, and it runs at a much lower volume.
Avery Tools was very helpful with getting set up with tools, and gave me a 10% "kit discount" or the sale price, whichever was lower, for any items I wanted to substitute. The pneumatic squeezer was on sale so I substituted the hand squeezer for it. In addition to the kit I had to purchase a compressor and accessories (hose, connectors, tire filler, etc.), a paint sprayer for primer, and a bench grinder. A drill press is recommended but I can use the one at my roomate's shop.