Best Starter Set-up

The longer dblue boat rods make a great kayak saltwater rod for very little money, (www.dbluefishing.com).

John has good suggestions, but I wanted to mention if you prefer spinning reels take a look at used Mitchell 306's and Penn 710's.  Most people prefer conventional, (casting) reels, though, because they can handle the weight better.

Conventional (casting) have way better drags than a spinner.  Most ocean fishing is where you just let the line it the bottom...no casting involved.  I like non graphite rods  it gives me more of a chance to bring in a big fish.  But, I am using braid and not mono.

Ken kickfish

I like graphite and braid to feel everything, but Ken has a point there with that not being too forgiving. However, I'd rather lose a couple than not feel them bite.

IMHO no need to spend more than $200 on rod/reel - you can get 2 good enough of each for close to that (eBay it, especially for reels), and you will spend the extra $50-75 easily on terminal tackle, leader, lures, bait, etc.

I like using mono for hard structure/reef fishing due to its ability to withstand nicks (Izorline First String 20# my fave).   A sensitive graphite or composite rod would give enough "feel" I think - generally you know when you get a bite, and if you don't, the fish may not stick anyway.  Were I to fish kelp beds and/or live bait, braid would seem to be a better choice for "feel" reasons John gave, as well as braided line may be able to cut through kelp snags better, where mono may be lost?  I dunno, must admit I have never used braid.

Cafecraig,

Try Braid and you will never go back to mono.  I use mono on party boats for Salmon and Albacore .  Mainly, because it is a problem to get untangle with other guys using mono.  And, they blame you for the tangle because you are the only one using Braid.

 But, if the bite gets tuff.  Then using a short top shot of mono on the braid and your live bait swims alot better (Albies).   Or, the Salmon picks up the dead bait better.  Salmon mooching is better if the line is vertical and with braid you can use less weight.  Always have a knife handy because braid is hard to cut and will cut into your hand.  If you try to wrap it around your hand.  You can wrap is around your reel a few times and pull with no bend in your rod.  It will pull out the snag or break off.

Ken kickfish