I teach alot of Open Water Classes and I get asked this question alot. Firstly, every new student should own their own personal gear fitted to them - mask, snorkel, fins w/ booties, gloves. After that everything is rentable. Don't rush your purchases. Do your homework, find out what fits you comfortably and meets your needs and is appropriate for your local environment. I always recommend buying for your local environment so that you feel comfortable diving often near home rather than a kit of rarely used travel dive gear sitting in storage while your dive gills (and skills) dry out.
I agree with Tobin, Andy and most of the above posters. Invest first in your exposure protection. Find something that fits you well, is comfortable, and appropriate for your local diving environment. If you are comfy, you will dive more...and who wants to rent a pre-peed suit - that's like borrowing underwear.
Secondly, I tell folks to invest the most of their budget in good life-support equipment - a good reg set-up with gauges or computer (computer can wait til later). Investing in mid to higher end regs for just a little more money really pays off in comfort level underwater since regs last many many years if well cared for and serviced according to manufacturer's recommendations.
The only time I waver from this advise it to WOMEN...rental unisex (aka men's) BCDs rarely fit women comfortably, so investing in a comforable BCD made specifically for a woman of your height is of utmost importance to keep you diving (spoken like the 5'1" shorty that I am). womens' BCDs are made with shorter backplates, chest straps in less sensitive areas, hip/waist dimensions fit curves better, etc. Each of my lady students who has gotten a good fitting comfortable BCD has shown remarkable improvements in bouyance and self-confidence in the water...THEN add your reg system/computer to your kit.
Do not hesitate to research gear online and then ask your LDS to price match. Many manufacturers are offering gear rebates and other specials. In this economy, many LDS will negotiate a great deal on a whole package for you. Try to support your local LDS if they are willing to work with you, and if not, find another LDS. If you buy locally, you will be able to get your gear serviced locally under manufacturer's warranty. A couple of bucks saved online might not prove to be such a deal if you can't get your gear serviced quickly or conveniently and your LDS is more likely to help you out of a tight jam when something does happen (ie free loaners while gear is being repaired, etc.). But I digress...
Bottomline - Invest in you what you feel comfortable wearing so that you dive more often.