What michaelpryor said, plus get a good book. I found it impossible to approach iphone programming without one. The one I used was from the Pragmatic Programmers.
By the way, if you want to cut costs, a mac mini or entry level macbook is fine for development. Get it with the minimum amount of memory and upgrade it to at least 2G memory yourself, as this is significantly cheaper than apple memory prices. With either one you should be able to reuse your existing screen, keyboard, mouse, usb disks, etc.
If you're going the mac mini route, you may want to hold off until the new models are in store, as rumours are they are going to announce a significant upgrade this week.
Oh and you don't need to download XCode, it comes on the install disks. Just download the SDK.
Last but not least, it may be stating the obvious, but you need an iphone device to test on. You can use the simulator in the SDK, but you still need to try it on a device. You can also use 'ad hoc distribution' to have friends with devices try your app out.
Good luck.