What I use is a cheapo Daiwa Minispin outfit. You can buy at Cabela's or BassPro for under $40. The unit is pretty lightweight: rod + reel + 100 yd 4# test + swivel around 8 oz. The reel itself is 5.1 oz. Below is a picture of my setup with a rod case I made from a a florescent tube holder ($2) I found at Home Depot. As Mike mentioned 4 lb line is good. I have tried several (including Vanish fluorocarbon) and have settled on Sufix Elite. It is a good, strong, inexpensive line ($7 for 330 yards).
The nice thing with this setup, aside from it being inexpensive, is that you can also use it with a fly & bobber technique - i.e. using flies with a casting bobber if you want to try your hand at it.
The equipment is strong enough to bring in large fish. The largest I have landed was a 23", 6.5 lb rainbow.
For lures I primary use either a
Mepps Agila (1/8 oz)
or a Kastmaster spoon (1/8 oz; gold)
Here my most recent catch (12/04/2007) with the setup: 14" and 19" bows.