I don't agree with the fish-in cycling method. Sure there are arguments that it's not as bad if it's done correctly, but it's rather cruel putting a fish through high levels of toxic ammonia and nitrite. Then after it's gone through all that stress and trying to survive it's returned. And nitrates come after the ammonia and nitrite which means the cycle is done which usually takes about a month or two. Damsels are very hardy, yet sometimes they die b/c the levels are just too toxic.I really don't recommend damsels anyway b/c they are very aggressive/territorial and hard to catch (might need to take rocks out to catch
). IMO the shrimp method or using pure ammonia to cycle your tank is much easier and there's no worry, feeding, or changing water (which could delay the cycle).
Cycle your salt tank - Aquarium Advice
I suggest washing the sand first (don't have to, but it can cloud your water A LOT). This is for non-live sand, not live sand. Then add water. RO/DI water is best, but since you're a beginner and prob. not wanting to invest $200 in a system and time, distilled water might be your best option. Your LFS might sell RO/DI.
Like the other poster said get the equipment based on what type of system you want (corals or no corals are the main choices). Soft corals don't require as strong lighting as hard corals do, so decide if you want soft or hard corals or both types. Lighting can be expensive, but craigslist might have some good deals. You don't need a protein skimmer since your tank is so small, keeping up on weekly water changes should keep your aquarium balanced in that aspect. A small powerhead would be a good idea to add to the list too, and salt of course. I use Red Sea pro coral salt, but Instant ocean reef crystals or standard salt,kent marine, and tropic marin are all great brands.