For chefs knives I second Victorinox, Forschner, or the Kai Wasabi line if you're looking for something decent and basic. You can save money on an 8 inch, but a 10 inch is more efficient. Your choice in length should also be relative to the size of cutting board you want to use. A rule of thumb is the knife should fit with a couple extra inches when placed diagonally on your cutting board. Plastic is okay, but cutting on a decent wood board is a joy. Maple is a personal favorite, avoid bamboo (itll kill your edge).
If you wanna step up to the $60-$100 you'll get a lot more options. Some Japanese brands to look for would be Fujiwara, Tojiro, and Richmond (American but Japanese inspired). All the knives they make are pretty good values. Stainless at this level is usually VG-10 or AEB-L (13C26 I think) for the Richmond knives and carbon is something by Hitachi usually.
If you wanna go French K-Sabatier and Thiers Issard sabatier can be had for under $100 for an 8 inch chef (the French carbons are particularly good, my 10 inch nogent carbon chef is probably my favorite knife). French knives also take well to a honing rod (a good fine honing rod is nearly a must with these knives, I like Idahone) where as most Japanese steel is too hard. The carbons are VERY easy to sharpen.
I would avoid German knives unless you get some old carbon stuff. They're not bad, but theres better value out there. Also if you're getting serious about cooking...a German shaped chefs knife doesn't reward you for good technique, where as the flatter (less belly, less "rocking" motion) profile of a French knife rewards good technique. Japanese knives are generally based on French profiles as well. The one notable exception would be most Shun knives, which tend to be more German in shape.
A quick thought on Shun (made by Kai, who makes Kershaw). They're knives are fine, but I lump them with the Germans. A lot of people are happy with them, but you can get better value for your money. As your knife skills get better you'll grow tired of most shuns just because they're not as efficient. Theyre fine knives, just not my cup of tea. The exception is the Wasabi line, they are just very high value in my experience.
For a paring knife get the cheap victorinox parers, can be had at kitchen stores for 3 bucks. You'll use your chefs for 90% of your work, put all the money there.
As for sharpening I use waterstones and edge pro. Edge pro really shines on small knives but is not great on something large (in my experience). I like waterstones, but oil stones are good too...really just up to your preference. I would recommend getting a waterstone in the 1000 grit range. You could also get a combo stone (lower than 1000 to repair and edge, above to get a less toothy edge). Norton makes a combo stone. King is usually pretty affordable for entry level waterstones. A side note, I learned to sharpen on waterstones with a Shun Classic 8 inch. Still works fine albeit a little scratched up. I think the worry about messing up a new knife is overblown. As long as you learn the basic thought process behind sharpening most errors will be fixable.
Possible kit:
$60- Tojiro ITK Shirogami Wa-Gyuto 210mm
$35- King 1000 stone
$5- Victorinox/Forschner plastic handled paring knife
Total=$100 (not including tax or shipping)
Extras:
$30- Fine ceramic idahone rod
$30- 16x10 Boos maple board
To wrap up, its entirely possible. It really just depends on how you want to divide your spending money.
