As Lennon mentioned it is not only highly recommended that you get a quarantine tank, it is vital to the health of your fish and tank inhabitants alike. The size of your quarantine tank depends on the fish you plan to add to your display tank. It needs to be big enough to keep each fish in there comfortably for at least a month. I use a 10 gallon tank, but the fish I'm adding aren't that big. You may want to go bigger. The purpose of a quarantine tank is to isolate each fish after you buy them for at least a month. In this time you watch for disease and health of the fish. Should a problem arise you can treat it without worrying about harming anything else in the tank (inverts, live rock, live sand, ext.). I cannot stress enough that you must quarantine every single fish before you put them in your display tank. It will save you lots of time and money. I'm actually very surprised it hasnt already been covered. From what ive seen, about half of all saltwater fish keepers end up having to treat their fish for ich ( a parasite that lives off the flesh of your fish). Dont think it wont happen to you. I lost 75% of my fish a week ago to it because I didnt quarantine my fish.
As for the quarantine tank itself, before adding water, paint the bottom of the tank black (not on the inside!!). It's pointless to add sand to this tank so you need to stop light from reflecting off the bottom of the tank, it will just confuse and stress your fish. Live rock and sand are not recommended and they will only die when you treat your fish. Add some PVC pipe so your fish has something to hide in and feel safe. A small heater and hang on back filter will suffice, you dont need a skimmer for this tank.
If I were you, setting up and cycling the quarantine tank would be my first priority. Its simply more time efficient to do it first. If you get your display tank cycled, do all your plumming, set up your sump and skimmer, ext youre sitll going to have to set up your quarantine tank and wait for it to cycle, then add a fish or two to the quarantine and leave then there for a month. Meanwhile you'll have nothing else to do except wait. If you set up your quarantine and cycle it at the same time, you'll be able to get your fish in sooner. FYI: If you throw a cocktail shrimp in each of these tanks it will help cycle the tank. A cocktail shrimp alone will do a great job cycling the tank.
Many people, including your local fish store will tell you that a few Damsel fish will do just fine cycling your tank. I wouldnt use fish to cycle the tank, especially Damsels unless you have already chosen the rest of the fish for your tank. Damsels are very aggressive and may not get along with other fish you want to add.
You will need a refractometer. Dont waste your money going cheaper and getting a hydrometer. They are very inacurate. You will also need a test kit to test for Ammonia, Nitrite, Nitrate and PH. These are the bare minimum, you should also test for other things to ensure perfect water conditions.
Incase you dont already know what happens during a cycle, fish waste and decaying organic matter (cocktail shrimp) releases ammonia into your water. This is very poisonous to your fish and should be at 0ppm (parts per million) at all times after the cycle. Beneficial bacteria in your live sand and live rock breaks the ammonia down in to nitrite, which is also poisonous and should remain at 0ppm after the cycle. More beneficial bacteria breaks the nitrite down into nitrate which is still harmful to your fish and should not exceed 20ppm after the cycle, 5ppm if you have corals. Nitrate is removed by a large water change 25 - 30% after your tank cycles and weekly water chages of 10 - 20% depending on how much nitrate is generated (how big your bioload is).
Well I hope that helps. Dont forget the quarantine tank! Good luck.