I make folders with a minimum of equipment, not a method your going to make a living at. I wrote a little bit about how I do it all in this thread(
http://www.bladeforums.com/forums/showthread.php?t=322063 ), I don't know how much help it is without pictures but I hope it gives people some ideas on how to start.
You might consider trying one that way just to see how you like makeing folders, and it will help you get an idea of what equipment you can or can't live without.
For really making a go at it, your going to want a milling machine. I can't offere much advice on which kind since I don't have one but it seems like most guys get by with a small to medium sized vertical mill. At the very least I would get a good cross vise on a drill press so that I could use a slotting saw to cut lock tabs with (assuming your doing framelocks and linerlocks).
I would also want a metal cutting bandsaw to cut everything out with as a hacksaw is pretty poor at cutting liner material.
A large beltsander, preferably set up horizontal, is really nice for flattening peices. You'll want a disc sander with a good work table for squaring up or beveling edges edges as well. I'd really like to have a small wheel grinder for shaping handles, but its not overly necessary.
A lathe isn't overly imortant unless you want to make your own hardware and fittings. You can buy thumbstuds, pivot pins and all that so you can get by without it. It would be really nice for making some stuff but unless your getting into super elaborate stuff I think you could do without it.
As far as hand tools, get a bunch of drills and taps in small sizes (I mainly use #2-56 and #4-40) And at minimum a good tap wrench. If your going to do a lot you should look into some of the jigs guys have made or set up your drill press (to be turned by hand). You'll also probably want a good set of needle files and regular files. A good high tension hacksaw frame and some good blades. Probably a jewelers saw as well.
If I had a ton of money I'd get a surface grinder cause the steel I get isn't always ground as well as I'd like. But I don't have a ton of money, don't make THAT many folders, and I'm probably not working with enough precision on the other stuff for it to make that big a difference.
Make yourself a jig for trimming screws. Take a peice of steel bar and drill and tap it multiple times for the different sized screws you might use. I have about 3 holes for each size in mine. Then you just turn the screws in to whatever length you want, and grind them down flush on the other side. That gets the end flat, and the threads are intact. Makes it very easy to get repeatable results and you don't have to dick around with messed up threads.
Well hopefully this is a start for you I'm sure some of the more experienced guys will chime in eventually.
