This is something I've wanted to post for quite some time, and with May being Bike to Work Month, what better time.
What makes a good bike for commuting? What equipment do you absolutely need?
Really, some of this is purely subjective and personal opinion. There are a few things that are absolute necessities, and the rest really are up to you.
A bike - OK, OK. I know you're sitting there thinking "Tell me something I don't know, Mark." Yes, I am telling you that you need a bike. But here's the good part: It doesn't matter what kind of bike you have! You want to ride a titanium frame racers? Great! A dual-suspension downhill mountain bike? Good for you. A 1950's beach cruiser? Cool! As long as you are comfortable riding the bike, ride what you want, even if it's a Radio Flyer tricycle (go for it, I dare you!). Make sure the bike fits you well, is comfortable and in good working order. I recommend caution with department store bikes. Some brands you will find at department stores use lower level components which are not easily exchanged or upgraded. Other brands, however, can be upgraded with new parts. If in doubt, take a cyclist friend with you.
A helmet - In my mind, this is a non-negotiable item. You have insurance for your car, consider this your very inexpensive insurance policy against head injuries. A helmet is not the magic force field that will keep you from sustaining any injuries, but it can protect you from potentially serious injury that will ruin your day, commute, and possibly much more. You can get a decent helmet for the price of a tank of gas for the average car these days. It's well worth it.
Lights - Unless you are able to commute both directions in daylight (and when it's not dark and stormy), this is probably a non-issue. But for most of us, we're not that lucky. Lights are a must in twilight hours, not to mention in the flat out dark. You should have a good bright white light for the front, and at least one red light in the back (preferably one that can be set to flash or trace to be better noticed). A recommendation I've seen is to have two lights up front; one bright fixed beam and one flashing LED. The flashing lights are supposed to draw a driver's attention to the fact that you exist. Remember, many cities/counties/states will require lights between dawn and dusk, or longer.
Basic repair tools - Patch kit, allen keys, spare tube tire irons and an air pump (make sure it's appropriate for the valves on your tubes). Having these things with you, and knowing how to use them, will allow you to get yourself going again quickly after a breakdown. Forget them, and you may find yourself hoofing it to the nearest bus stop, or the intersection to call a taxi.
Something to carry your stuff - Backpack, messenger bag, rack and panniers, basket on the front or back of the bike, trailer. Really, it doesn't matter. There are many, many options out there. Look for what you like and go for it. Many backpacks, panniers and messenger bags are now made to be truly waterproof, not just coated nylon; definitely consider these if you ride in wet regions and need to buy something new. If you already have something you'd like to use, you can always pack your books, clothing, laptop, whatever, in plastic sacks inside of your existing carrier to keep it dry. Be aware that whatever you choose to carry your stuff may affect your balance and the over all ride. If you can test options out with your typical load it will help you decide how to carry your stuff.
Lock - Unless you have a place that provides secure storage for your bike, you'll want a good lock. Invest in a heavy-duty (and heavy) U-lock such as those made by Kryptonite. Cable locks and light chains are easily cut, but the hardened steel on the U-locks is much more difficult to cut, and is also quite resistant to prying/jimmying.
Knowledge of traffic laws applicable to cycling - Most are the same as the rules that apply to motorists, but there are some differences. Know them and follow them. You CAN be given a ticket for breaking them.
Special clothing - You can ride in your work clothes. In fact, if it's a short ride, it may be preferable. If you have a longer ride, you might want to set aside clothing dedicated for your rides. You don't have to buy the fancy spandex stuff, a pair of sweats and a t-shirt and sweatshirt work fine in most cases.
Rain Gear - Well, here in Seattle, this may need to be in the necessities section, but if you're a fair-weather commuter, you may be able to get away without it. Again, you don't need anything fancy, just something to keep you dry from the outside, and preferably something that vents well to keep you dry on the inside as well.
Fenders - These are great to keep the road muck off your clothing in the rain and wet. If you choose to commute in your "street clothes" these may move more into the necessity range (you may not want to go into that business meeting with the skunk-stripe of mud and road muck up your back), but if you have separate riding clothes and you change at work, you may not want these.
Water bottle or "hydration system" - A ride of just a few blocks probably won't require this, but it's always good to have something to satisfy your thirst as you ride. For longer commutes, it will become more of a necessity.
Really, in the end you don't need a whole lot to get going. Many of the requirements can be found at very reasonable cost. And while new gear is shiny and looks good, it quickly starts to look like the used stuff. Consider picking up used gear where ever possible. You'll save a bit of money and help reduce waste by filling out the useful life of something someone no longer wishes to use. A well maintained bicycle can have a very long useful life!
Now, size up what you have and determine what else you need and start riding!