Bentley:

Salmo's right in that you don't need to buy a premium outfit to fish effectively, and I wouldn't discourage you from buying a low-end outfit strictly for performance reasons. That said, and although I personally haven't spent a ton of money on my outfits, there are some reasons I find very compelling for spending over the bare minimum. Whether or not you can relate to these reasons will likely depend on how much fishing you plan to do, what species you intend to chase, and how much value you place on the aesthetic aspects of the sport. I am by no means a high-end apologist, having personally never spent more than $400 on a rod/reel/line combo. I do have a few premium rods in my arsenal, but I have gotten each one of them on the cheap (eBay, Craigslist, consignment, etc.). With all that, here are my reasons for spending a bit above the minimum:

1. Warranties - Lower-end rods don't carry them, but most moderately-priced ones do. If you plan to do a lot of fishing, it is all but guaranteed that you will break your rod, and more than once at that. Even if you only fish once and have an accident on that one outing, you will still be out whatever you spent when the rod breaks. With a warranty, you only need to pay the shipping costs (about $25) to get your rod repaired or replaced. This is the best reason, in my mind, to spend a little more, especially if you plan on fishing more than a few times per year.

2. Performance - I think there is plenty of room for debate here, but personally, despite being less than an elite caster, I can definitely feel a difference between most low-end models and a middle tier rod. I think this probably has a lot to do with casting style, among other things, but I think it's a good idea to try a couple of different models to see if there really is a difference for you. If you do notice a big improvement in your casting with a more expensive rod, it will pay off big time in the long run if you do whatever is necessary to extend your budget in the short run. Again, the validity of this reasoning probably will depend on how much fishing you plan to do.

With reels, there is a clear difference between cheaper reels and more expensive models. There are variables involved here, too. As Salmo said, if all you ever catch on a given reel is small to moderately-sized trout, where you can simply strip the line back in with your hands, you will never appreciate the reasoning behind spending a bit more on a reel. However, I find that when fishing, things rarely go exactly according to plan, and sometimes the little "accidents" come in the form of much larger than expected fish. Landing the big ones almost always requires fighting them on the reel. A strong run from a big fish will often blow up a cheap drag system, or else the roughness of the drag action can cause the reel to backlash and come tight, thereby breaking off your fish of a lifetime. The first time something like this happens, you end up with a great fish story that is a lot of fun to tell. If it happens again, you will probably feel like a fool, which is not as much fun. In short, I recommend spending enough on a reel to get a quality drag. This is a much bigger issue when you know you are looking for big fish.

3. Aesthetic considerations - These considerations are, by far, the least important to me of those I am addressing, but they aren't without some measure of merit in my mind. I do as much fishing as I can, for many more reasons than catching fish. One of the most satisfying things I have gotten from all that fishing has been watching myself evolve into a better caster/presenter over the years. Many fly fishers will tell you that once you have caught a lot of fish, you start to place more value on how you go about catching them. Fishing the way you like to fish in as many situations as possible requires the ability to make consistent presentations from different angles and locations. Personally, I find it helps a great deal to get consistent performance from your rods and lines. I am generally more consistent with my higher-end rods than my low to mid-priced models.

Another aesthetic consideration (if a bit petty) is the feeling of pride I get from lining up my Winston or my Thomas and Thomas. These are both beautiful examples of quality crafstmanship, and it is a sincere pleasure just to own them. I suppose it's sort of like a fly fishing equivalent to a guitarist taking his American Standard Stratocaster or original Les Paul out of its case. Chances are he really couldn't afford it, but he made sacrifices to own something that symbolizes a pinnacle of excellence in his chosen pursuit. As I said earlier, I got both of these rods on smoking deals, and I would not have paid retail for either one of them. They were still pretty pricey (by my standards), but I am very comfortable in saying they were both solid investments in the hobby that means so much to me.

In conclusion, I think it's important to stress the fact that different anglers have different needs and preferences, and those differences (not price or status) should dictate the equipment he or she buys. I strongly encourage you to cast a few different rods, in various price ranges, before you make your purchase. You may find that one of the lower-priced models works great for you, and depending on how careful and lucky you are, you may get a lifetime of good use out of such a rod without breaking it. Still, in terms of real value added, I would suggest that warranties are the most compelling reason to invest a bit more than the minimum. Most major manufacturers offer at least one model at a moderate price point ($200-$350) that is guaranteed unconditionally. Personally, I think this would be your sweet spot. If you just can't go that high, I have heard good things about the performance (not so good about the quality) of the cheaper Cabelas models, and they should be a good place to start. If you decide to go that route but have really enjoyed casting a more expensive rod, keep an eye out on eBay, Craigslist, and fishing forums for great opportunities to get yourself into an upgrade down the road. That's the only way I have managed to do it.

Whatever you do, have a great time doing it, and may it result in frequent tight lines.