I think this is one case where "necessity is the mother of all invention" is really the case. I'd start with figuring out how to make the space you have work best for you. My shop is in the basement because i have nowhere else to work. However, even if i did have a garage, i'd probably still be in the basement because of the cold winters.
Make sure you've got some decent lighting and enough electricity to power the tools you need. I know people who do great work in a converted spare bedroom. I know people with incredibly equiped shops that never come close to getting the full benefit of their investment. Remember that it's the craftsman, not the tools that make fine work.
Some sort of work bench is usually a given. I've got a decent bench, but have done quite a bit on saw horses or a Black & Decker Workmate.
I'd buy only the tools you need for the project at hand, and keep in mind that there are several ways to do any given task. It may be worth while to pick up a tool that is very versatile or will get frequent use. For instance, depending on what you're doing, a drill press or table saw may be a great purchase, but a thickness planer or mortising machine might not be a very practical purchase.
I'd start simple and work up over time. For one thing, you'll probably gravitate towards certain types of woodworking. As you do that, you'll know more specifically what might suite your needs best.
Also, i always advocate buying used equipment if you can find it in decent shape for a reasonable price. With a little homework you can get very good tools at a huge savings over new. And, if you later decide to upgrade or get rid of it, you can generally sell them for what you bought them for. That's simply not possible when buying new.
Have fun with it.
Paul Hubbman