I am about to embark on this new addiction affectionately called homebrewing

I have yet to purchase anything - what is a good starter kit - I don't want true entry level bc I would prefer equipment which I can add to as opposed to replacing.  Any suggestions for a good starter set/kit for no more than $200 (preferably less)?

Welcome to the precipice, there's no turning back!

You could always start with your local homebrew shop for a kit, buy a used one or do a little research and put together your own.

Good luck and welcome to the forum.

cheers

Remember that Craig's List is your friend.

Where are you AL? The cool thing about this hobby is folks help each other. An experience brewer or club could help you a lot.  $200 should get you going.  you can also snag real good deals on stuff at you local brewshop if they have a bulletin board.  I see carboys (the glass fermentors) on the cheap listen there.  craigs is good.  do you like making things?  I have made all my "level 2" stuff. 

There are many styles of brewing and beer.  I would still recommend a few beer kits to begin.  you learn about fermentation.  Then you can move to All Grain if you want.  All Grain is more gear but cheaper and usually bigger batch size.  with BeerSmith and All Grain brewing you can really make any BJCP style. 

My first kit was:
autosiphon
bottling bucket (waste of space get buckets without spigots IMHO)
"fermentor bucket" pretty much a waste but brweres need lots of buckets.
hand capper
hydormeter
and some random lil things. cabs sanitizer, bottle brush, etc.
I bought 2 glass 6 gallon carboys right away because my mentor used them
I also bought a entry level stainless 6 gallon pot.
The last two good items are a beer thermometer
and the jet carboy and bottle washer.


Best of luck.

After spending several thousand on brewing; you will look back and say, "gee, that first $150 worth of equipment was really all I needed to brew beer."  Then you will go out and buy more stuff anyway.  
Basically, any of those starter kits that your LHBS sells (or online, like MidWest Supply) will do the trick.  And yes, the more pricey, the better. Ya can never have too much brew stuff.

If you are just starting out with all grain please take a look at http://www.biabrewer.info This is the site for "Brew in a Bag" home brewing. This is the easiest, fastest and least expensive way to brew beer. BrewSmith 2.0 works well with BIAB. I used to be a 3 tier brewer and made great beer. Now I make the same beer in less time. I normally brew two beers in a day now. I have had to increase my drinking to keep up with the extra beer! Good brewing to you! It's a good hobby no matter how you  do it!

  Here is a web page with me as an example.  http://www.stempski.com/biab.php

If you are in Alabama then you can check out Alabrew, and there are clubs as well. The Birmingham Brewmasters and Carboy Junkies .....

I'd suggest starting with a 6.5 gal glass carboy and fermentation lock, auto siphon, thermometer, carboy brush, bottle brush, capper and seven gal brew pot.  You can away without the auto shiphon, but it makes it a whole bunch easier.  These are all things you will want to use long term if you enjoy brewing.  If you know anybody that works at a chemical plant, ask them if they buy any reagent grade chemicals in carboys - I got all of mine from work for free and they came with nice Styrofoam cases.  A bottling bucket is another nicety for doing bottled beer.  You can buy a 5 gal pail from Lowe's or K Mart and put a cheap spigot on it.  I only bottled one batch before jumping to kegs - cleaning bottles was way too much work for me.  I'd also strongly suggest getting 50 ft of 3/8 copper tubing and rigging up a wort chiller.  You can use ice bags for the first time if you want to spend as little as possible to see if you like it first but the wort chiller is SO much easier and faster and faster cooling makes better beer.

For cleaning, I'd use oxyclean for cleaning and get some Star San for sanitizing.  I mix up a 5 gal bucket of it and use it repeatedly for months.

Start with a beer kit but buy How to Brew by John Palmer and read it before starting.  Its easier if you start with extract and then progress to steeping grains and finally to all grain if you find you like doing it.  At that point you would want to consider making a mash tun and hot liquor tank from a couple igloos.

If you plan to do kit brews you can do well with less than a hundred.

If you want to take the next step and go all-grain you can spend that entire two hundred on your brew pot.

Read Papazian's first book. Here's a link.  http://en.wikipedia.org/wiki/Charlie_Papazian#Complete_Joy_of_Home_Brewing

I started with kit brews and was all proud of myself until I did my first all-grain batch.  I haven't purchased extract since, though I have spent more money on equipment than I would like to admit.

Though the equipment costs are higher to get into All Grain brewing, the grain cost per batch will be considerably less than buying extract.  You also have more control over the process with all grain, more creativity, and the potential for a much better brew.  If you continue on with your brewing, the lower batch costs will gradually pay for the additional equipment costs.  ....unless you are like many of us here that are always looking for something else to buy for our "Breweries." 

None of us do this strictly to make a less expensive beer, though you can not buy beer of home-brew quality off the shelf at the cost we can make it.  The bottom line is that most of us home-brew because we love beer, we are creative, we like doing things ourselves, and we enjoy sharing our creations with friends and family.  Like any other activities that we take up, it is often worth a couple bucks if it makes it that much more enjoyable.  I could not even add up all the money I have spent over the years on fishing, shooting, skiing, golf, etc.  I still enjoy all of those activities, and I now  put brewing at the top of the list.

My advice to anyone considering home-brew:
    Start with a kit brew and work your way up as you learn.
    Read & learn all you can about the process, and beer styles
    Make a point of trying and appreciating different beer styles
        (If all you enjoy is the Big 3 light beers, Home-Brewing is probably not for you)
    Enjoy the process as much as you enjoy the results
    As you learn more and find how enjoyable it is you can move to All Grain and other processes

Cheers!