First, I want to commend you for an excellent list! We need budget options for young people (such as college students) starting out as well as for those impacted by the recession! For many of us, unless we have money to burn, it's not a good idea to invest a lot of money in an activity until we're sure that's something we really want to do. I did quite a bit of research a year ago for my then 18-year-old grandson who was looking for budget gear.
A few observations:
Some of us dislike and avoid Walmart, but athletic departments in other discount stores will have the same or similar stuff at similar prices. REI, IMHO, is one of the most expensive places for socks (or almost anything else). Athletic departments in discount stores will have just as good socks (avoiding cotton). Costco (for members or those who can get a member to shop for them) has excellent quality merino wool socks. I've found good bargains on socks and other items at big-box sporting goods stores, too--just need to be careful about quality and weight and, of course, fabric content.
Most people own some kind of running-type shoes anyway; unless they have slick soles, they'll be fine for backpacking. That's zero cost! Many will have at least some components of their clothing system already in their closets, which should be checked first before going shopping--as long as it isn't cotton!
Thrift stores often have clothing (particularly polyester fleece and synthetic fabric shirts) for a lot less! Often you can pick up lots of other gear items there. Maybe even a used pack! Several trips to several different stores are apt to be more productive.
Military surplus is another good place to look. Some years back, all of us in the climbing/hiking club I belonged to then bought Air Force surplus tropical weight wool/polyester pants for about $10 apiece. Comfortable and wore like iron (I still have mine!). Never mind that we looked like a uniformed group!
I have a problem with relying on closeout sales for low prices because the same item is never available later on. It is a good idea to watch for and take advantage of sales and especially check the various outlets (REI, backcountry.com, etc.), but such bargains are not always available when you need them! There are other possibilities, such as the Campmor 20* down sleeping bag, often recommended as a low-budget option, even though it's more a 30* bag.
Sometimes a cheap big box store pack will fit just fine; it's worth taking a look, as long as the beginner remembers that comfortable fit is far more important than price.
A number of items are available at the local hardware store--blue tarps, mason's cord, gutter nails. You could even make tent stakes for free from metal coat hangers!
Baking soda is lighter than toothpaste, dentist-recommended and has multiple uses.
Here are some other references I've found for budget stuff:
Mark Verber's "Backpacking for Cheap" has good ideas and a bunch of good links: http://www.verber.com/mark/outdoors/gear/cheap.html
In addition, in each of the categories of his "Reccomended Outdoor Gear," he has a final paragraph listing low-budget options. http://www.verber.com/mark/outdoors/gear/index.html
Here's one from WhiteBlaze (may be the same as the Sgt. Rock one linked to on Mark's site): http://www.whiteblaze.net/forum/showthread.php?p=206678#post206678
On the Gossamer Gear website: http://www.gossamergear.com/gossamergear/images/gear_lists/Ultracheap_Henley.pdf
I hope these help! Thanks again for an excellent addition to the literature on low-budget backpacking gear! If you can gather some of the other info linked here into an article to go with your list, that would be wonderful to have a single, up-to-date source!