To be at least dangerous around an electronic work bench the following tools are absolutely critical:

• Basic set of pliers - wire cutters, needle nose and basic pliers
• Small screwdriver set - typically sold as 'jewelry' screwdrivers. Flat and Phillips are minimal.
• A good knife (I use a two blade Swiss Army knife - "If I can't fix it with my knife, chances are it's not worth fixin' "
• A soldering iron AND a desoldering pump (the desoldering pump is critical for undoing mistakes or cannibalizing old projects / surplus electronics).
• A multi-meter. Try and find one that gives at least a couple ranges for resistance and can handle 10A DC current. (I've got a really nice digital one for about $10 at a local surplus store). DON'T waste money on high end super fancy meters unless you truly need and understand all the functions. Unless you are buying extremely expensive meters like Fluke, odds are you won't use all the features and you'll eventually end up busting / blowing the meter. A cheap meter is less painful to replace with another new cheap meter then a more expensive one.

Other tools / supplies that can make your life a whole lot easier include:

• An extra pair of hands. For very little money you can get these little clamps that mount to a heavy base and can hold wires, boards, etc. while you use one hand to hold the soldering iron and the other to hold the solder / desoldering pump. Ditch the magnifying glass that typically comes with these - it makes them too unstable and just gets in the way.
• Jumper wires. RadioShack sells a package of 8 wires with small clamps at the end for only a few dollars. I bought some a month ago and this has made getting power from here to there so much easier.
• Cleaning / tinning sponge for your soldering iron. A clean iron works better.
• Prototype boards - the temporary kind that you can push wires into and quickly test out circuits before committing them to a printed board. Don't waste money on pre-cut / stripped prototype board wires. Just get a bulk pack of 22 gauge wire.
• Cable ties and multi-coloured electrical tape can really clean up a project and give it that professional touch.

• Get your soldering iron hot and keep it clean. The hotter and cleaner it is the quicker it will melt the solder and the sooner you can get out of there. I have found that in general having a hotter soldering iron results in cooler components because I don't have to hold the iron to the component as long. As well, a hot part is required for a good connection. If the solder cools into a ball with the edges curling under it has not stuck to the material and will easily brake off. You want the solder to melt by the component and not the iron.
• Watch for stray strands of wire - I stopped counting the number of time a electrical piece failed because of one tiny strand of wire didn't go through the hole, but went beside and over to another component - shorting out the circuit.

Basic tools required are:

• A drill and a good set of drill bits. Cordless drills are an excellent purchase for this area as they keep the cord clutter to a minimum.
• Screw drivers - big ones, not the jewelry type. You'll be tackling screws and bolts that are tight and if attempted with jewelry screw drivers will result in painful blisters on your fingers as the 'grip' peels your skin.
• Small wrench set. At the very least a Crescent wrench and Vise grip will help undo stubborn nuts. I wouldn't recommend these on nuts you plan on keeping…
• Hacksaw
• Bench vise

Tools that are really nice to have:

• A Dremel © tool or equivalent high speed rotary tool. These make cutting, grinding those small pieces so much easier.
• Drill press.

• When trying to assemble gears, etc. Don't bother being precise, because if you are not bang on, it won't work. Put some slop into your holes, move things around until you have a nice mesh and then clamp it down tight.

Basic tools that are required:

• Hammer
• Saw - Hand saws will work - eventually. Get a basic Skill © saw and a couple different blades. Make sure they are Carbide tipped. And don't waste money getting them re-sharpened. Any basic hardware store will eventually put on sale a set of 3 carbide tipped blades (fine, medium and coarse teeth) for less money then the cost of sharpening one blade.
• Tape measure
• Drill - At this point, I would be cautious about recommending a cordless. The demands of drilling wood will eat batteries and only the really big (expensive) cordless drills can deliver the torque required. I would get a basic 3/8" variable speed drill from your local hardware store.
• Coping saw
• C clamps

Nice to have tools:

• Mitre Saw - powered or not.
• Scrollsaw or at least a good jigsaw.
• Lathe
• Saw-horses. These are easy enough to make and should be a first project once you have some spare 2x4s lying around.
• Chisels, pry bars.
• Planes (powered or not).
• Belt sanders

• Scrap plywood makes great bracing when butting two boards together to form a corner. Simply screw in with dry-wall screws for a fast, strong and easy to undo assembly.