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If you have a lot of cds already, then your choice is simple. Go for cds. It doesn't make sense to buy all of the tracks that you already have again in a different medium.
As far as what you should spin with, well, I would get okay decks and a good mixer to start off with. You can research what fits your needs yourself. I would suggest though, that you don't get cd decks with moving parts (ie trays or lids). Pioneer CDJ-100s are what I have, and they are great, but they are expensive.
As far as music goes, check out the sticky thread here on online music stores. There are a lot of them and many have sound clips that you can listen to before you buy.
I would also suggest that you get at least one turntable--even if it isn't a dj TT--so that you can record all of your vinyl onto cd and so that you can buy more vinyl to get tracks that aren't available on cd. This way you will never have to regret not getting TTs or getting cd decks.
For mixing techniques, I would think that using the teasing technique would work well. Once you have the tracks beatmatched, then you can play both tracks simultaneously to create twice the energy, or at least compensate for energy when the first track lacks it. Just make sure the two tracks go very well together!
To keep costs down, you have to consider two things. 1. The price of the equip that you want and 2. the price of the music from there after. You can easily spend hundreds of dollars more on your music than your original equip cost, but your music costs will be much more spread out. Just make sure you remember that your music costs will eventually be the most exspensive part of djing!
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When you dance, the DJ takes you on a journey, but he or she is usually not the focus of your experience at a club or festival or wherever you hear the music. Dancing is. Music is.
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