I won't get into the hardware part of it, they covered it pretty well above.
As far as your CDG catalog selection goes, you should get a good core:
DK Millenium or if you can find the Original DK set (kind of older, out of print, but a good starter). If you don't get the DK stuff, get the Sound Choice Foundation 1 & 2.
You can also add on the SC Bricks later. They make 5 bricks, I believe. SC just reduced the price per "brick" to $129 each
http://www.soundchoice.com/products/cdg/sets/bricks/
They also have some other cool stuff like a Headbanger's pack (hard rock stuff), a 70's & 80's set, some other genres too.
You can also look around other brands for discs like "hits of the 90's" to kind of fill the gaps. I would also recommend buying the newer stuff and trying to keep it updated if you're doing a lot of shows.
Another suggestion is once you roll it out, you won't have every song that "Joe Karaoke Company" has, so if someone asks for a song that you don't have, write it down and work on adding it into your next update package.