I would stay away from the kit. Like you said, they come with a filter that isn't that nice, and I think they also come with a heater that is a little underpowered and maybe not even fully submersible. I had a Top Fin filter for a 10 gallon tank once, and I found it to be loud and inefficient. I got my 29 gallon tank at Petsmart for about $65-$70 and it came with the hood and light only. That was ok with me because I knew I would want to buy a higher quality filter and heater. A 29 gallon is a good size for starting out, and gives you quite a few options for what you can keep.
As far as equipment recommendations, I would choose an Aquaclear 70 or Emperor 280 for a 29 gallon. Each of these are quality filters and each has its benefit, so you can't go wrong either way.
http://www.petsmart.com/global/prod...1146576230031&itemNo=2&In=Fish&N=2030112&Ne=2
http://www.petsmart.com/global/prod...1146576230036&itemNo=4&In=Fish&N=2030112&Ne=2
Don't pay attention to the manufacturer's ratings. You'll want to turn the water over about 10x per hour, whatever size tank you get. The Emperor has the Biowheel, which is nice, but the Aquaclear is cheaper to use in the long run and more customizable. It uses sponges instead of cartridges like the Top Fin, Emperor, Whisper, etc. The sponges can be rinsed in tankwater and reused, and you don't have to spend money on cartridges. Either of these filters are easy to maintain. I've heard some not-so-good things about Whisper filters so I wouldn't recommend those.
As far as heaters go, you'll want to buy one that is fully submersible, and aim for about 5 watts per gallon. 150 watts would be fine for a 29 gallon. Here are some good brands:
http://www.petsmart.com/global/prod...1146576643798&itemNo=0&In=Fish&N=2030060&Ne=2
http://www.petsmart.com/global/prod...1146576643837&itemNo=1&In=Fish&N=2030060&Ne=2
http://www.petsmart.com/global/prod...1146576643848&itemNo=3&In=Fish&N=2030060&Ne=2
http://www.petsmart.com/global/prod...1146576643876&itemNo=7&In=Fish&N=2030060&Ne=2
For substrate, you can of course buy any gravel that you see at Petsmart or your LFS, or you can use sand if you want. Your LFS should sell sand (be sure not to choose aragonite or crushed coral, as these will affect pH), or you can go the cheaper route and get a bag of pool filter sand at a pool supply store. I paid $10 for a 50 pound bag.
You'll also need a dechlorinator to detoxity your tap water. This is what I use:
http://www.petsmart.com/global/prod...146577038820&itemNo=10&In=Fish&N=2030068&Ne=2
There are lots of brands that will work fine.
Also, be sure to read up on the nitrogen cycle. You will need a test kit to monitor your water perameters. Here's what I recommend:
http://www.petsmart.com/global/prod...1146577038659&itemNo=0&In=Fish&N=2030068&Ne=2
The Master Test Kit is the one you'll need.
This article describes the nitrogen cycle:
http://www.aquariumadvice.com/article_view.php?faq=2&fldAuto=21
You can cycle your tank without fish, which is much more humane than exposing fish to toxic levels of ammonia and nitrite while the tank cycles. Here is an article describing the process. It says it's for saltwater but the process works the same way in freshwater too.
http://www.aquariumadvice.com/article_view.php?faq=2&fldAuto=15
I don't know of any good books to recommend, but this site is very helpful and has plenty of articles to get you started. We will be happy to answer any questions.
Welcome to AA!