Router with 1/2" collet. I like Porter Cable, but any major name brand will do. Doesn't have to be a plunge router. You can do the same thing with a regular router with a little practice. 1 1/2 HP or so is fine for most uses. Good source for bits is MLCS Woodworking
. They have nice router tables and fences, too.
As Norm Abram on This Old House said: "You can never have too many clamps." If you do much woodworking you will find yourself needing lots of c-clamps and pipe clamps. Harbor Freight has both, but you will find you life much easier if you stick to major name brands like Pony and Adjustable.
A hand held belt sander is for removing lots of wood fast. It has almost no place in finish carpentry IMHO. It will put gouges in the surface and turn a nice flat surface into a wavy one in no time. The advantage of random orbit sander is that there the scratch pattern is more random. Sand a piece of wood in one direction with a piece of coarse sand paper. Now do the same thing to another piece of wood, but make every stroke a different direction. Take a look at the results.
If you are going to do a lot of work with rough lumber, you will need a surface planer, a thickness planer, and a jointer. Otherwise find lumber that has been surfaced on two sides to the thickness you want. You can joint with a router and a split fence or jig.
Find a real hardwood lumber store, not your local home improvement store. They exist in most large metropolitan areas, and others. Besides having the wood, many are capable of thickness sanding or planing, custom mill work, etc. If you cannot find one, an alternative would be to buy dimensional lumber from an online source such as Constantines