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That's a lot of information you are requesting and everyone who answers you will have a different opinion on what machine, backing, thread, etc.
You need to visit a tradeshow such as Imprinted Sportswear Show - www.issshows.com - and look at all of your options for equipment, supplies, shirts, etc.
The brand of machine is not nearly as important as the training and tech support you will received.
I have a Barudan, but know that SWF, Tajima, Toyota, Happy and Melco make good machines.
Cutaway backing on knits (polos) and tearaway backing on wovens (denim) are a good rule of thumb.
There is a lot of good thread available. I use Isacord, Madeira, Robison-Anton and Sulky. The brand of thread won't determine thread breakage as much as the equipment you use.
Shirts can be purchased from many, many sources from really cheap to really expensive. Just depends on what your market is.
You need to do a lot of research before you get into the embroidery business.
In the meantime there are a lot of great contract embroiderers who can help you.
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