Jeff, a very good dovetail saw that does not cost a fortune is the one offered by Lee Valley: http://www.leevalley.com/US/wood/page.aspx?p=64007&cat=1,42884
You have choices between 14 and 20 tpi. The lower number will cut more aggressively, and the higher number will give you a thinner kerf (for skinny dovetails).
Inexpensive chisels are fine, you will just need to sharpen them more often. When you want to invest in better chisels, I recommend Japanese. They take a while longer to sharpen, but they hold an edge for a very long time.