when i had only read your subject line without opening the thread to read your actual post, i thought, "$100". if you want to find a used machine, you may have better luck at thrift stores. around here, they are typically $25 in an old-school sewing table (or sometimes it's newer and in a case). you'd also then want to get it tuned up - so it's not really saving any money over the wal-mart version. but even $100 isn't a huge investment, and if used machines are going for $100 on your local craigslist, you could probably recoup some of the cost if you decide you hate it and don't want your machine anymore. for cheap fabric, thread, elastic, trims, etc: thrift store!
i started by just guessing at stuff, as a kid. (got my machine for my 11th birthday!) i've never been big on following patterns. however, i do like making things from 'tutorials' where i use a template or it explains how to make my pattern pieces. some really easy things to start sewing with are panel curtains, 'envelope' cushion covers (see the chez larsson blog for instructions!), simple tote bags, pillow case dresses or tops. craftster is a good source for free projects. there are some easy projects in the books 'weekend sewing' and 'handmade home' which you might be able to get from the library. i love vintage patterns and books for inspiration, but for actual projects, i think modern stuff is way less fussy and easier to follow. oh yeah, i also love amy karol's blog (angry chicken) and i bet her books are great - just haven't checked them out yet.
i would rather have a friend help me out once in a while (and most people who sew would probably love to help you!) versus taking a class. that way, you make the projects you want to make and get one-on-one help when needed.
my advice: measure twice, then cut!