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While I haven't tried out all the higher end options, what I've settled on are minilabs - One in a local CVS, another in a Duane Reed near work (both drugstore chains) where development + cd runs less than $6 per roll, sometimes half that. They both use Noritsu machines. The scans are about 1540x1024 plus or minus a few pixels - 1.5 or 1.6 MP that would be called. Entirely sufficient for most of what I do, and very cost effective.
I also use a local MotoPhoto minilab, they use an Agfa machine and do good work. The scans are much more saturated. I get my medium format developed there - minilabs can do that, many just can't print.
My advice is to start with these kinds of local and low cost options, and see how you like the results. Burn up some film getting the hang of the whole process. Then if you're hankering for more, you can invest in high end processing/scanning, or your own scanner.
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I have an Epson 4490, got it cheap, and it's fairly good. Newer and more expensive Canon and Epson flatbeds are better these days, and Pop Photo just had a fluff piece on a very interesting looking Microtek Artixscan. It's probably still hype, but it is said the flatbed scanners are starting to match the dedicated film ones.
But with scanning, as people above mention, you get into a whole new learning curve, and if you're like most of us, you'll be huffing and puffing, as you try to work past the basics.
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Resolution is something that gets talked about... it really has two different sets of meaning. First is the capture resolution - this is equivalent to the camera 'megapixels' : how large a bitmap does the scan produce from the negative. Higher resolution scans produce larger bitmaps, and capture smaller specs from the film. This is like saying a 10MP camera will out resolve a 1.5MP one. (of course MP isn't the whole story)
Now that you have the bit map, the display resolution determines how large the resulting picture is. Photo print quality is usually quoted as 300DPI - though around 240 and above is plenty photo quality. That 1500 bit wide drugstore scan will print at 5 inches at 300DPI. It will display 21 inches wide on a computer monitor, at 72 DPI. Note that in either case, the information is unchanged, only the display is different.
The 10 MP image, say 5000 bits wide for the sake of argument, will hit physical limitations in the (inkjet) printing process - to print 5 inches wide somewhere the 1000DPI will be cut down to what the process can handle. The difference a large bitmap gives you: 1) you can do a larger print without 'enlargement' and 2) you can do more editing and throwing away of bits. But consider the 5000 bit wide image on screen is 69 inches. You'll be cutting that down to show us here... throwing away that resolution you worked hard to get in the scan... But that's starting to get philosophical.
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