Ok here are the basics of knitting and crocheting as I know them.
Knitting is done with yarn and two pointy sticks (generally, we'll get more into the exceptions in a bit). While, crocheting is done with yarn and one hook. In both cases the knitting needles or crochet hooks can range in size from very tiny to very large.
Yarn for knitting or crocheting can be made from a variety of fibers. There are yarns made of all sorts of animal fibers, such as sheep, alpaca, goat (cashmere or mohair), rabbit (angora sweaters anyone?), camel, llama, yak and musk ox. Additionally yarns can come from plant fibers such as hemp, cotton, linen, bamboo, corn, and soy. Then if you're looking for even more yarn there are the man-made fibers such as acrylic or nylon. Many knit-snobs will frown on the use of acrylic because they think it is too plastic-ey. I however like acrylics since they are CHEAP. There are several good brands of acrylic yarns out there that are soft and not too plastic-ey.
Needles for both knitting and crocheting can come from a few materials. Usually metal, bamboo, or plastic. Crochet hooks generally don't vary in size (except in the case of tapestry hooks, which I dont know much about and therfore am not going to get in to). Knitting needles on the other hand come in a very large variety of types. there are the general long pointy ones. Then there are ones that are called double pointed needles (dpn's) and they are just that, a stick with a point on both ends. Dpn's are really good for small circular projects like hats or mittens or socks. If you're knitting a larger item (like a sweater) then you can use something called a circular needle. This is two knitting needles connected by a flexible cord that lets you knit bigger things or things in a circle.
Gauge is possibly the single most important thing when it comes to knitting (at least how I see it). Your knitting gauge is when you do a test knit with the needles and yarn you want to use to see if your knitting matches up with the knitting the pattern calls for. When you do this you knit a square and then you count how many stitches are in an inch (or four inches etc). If your gauge is too small you can go up a needle size and try again, if it's too big, go down a needle size. This is REALLY important because if you dont do a gauge swatch (that's what the square is called) you will end up with something that is either too big or too small and you'll have to go through the heartache of frogging it (frogging is the knitter's term for ripping something out because you "rip-it rip-it" get it? I didnt make this up). For instance, instead of getting a nice hat to fit your boyfriend's 23 inch head you will get a tube that will fall down over your friend's 36C chest.
There are many, many books out there that are about knitting and crocheting. I would have to say that the Stitch 'n Bitch books by Debbie Stoller are really great intro books. They give you lots of information as well as many patterns. If that dosent work for you, try your local library or bookstore, they're bound to have books on knitting and crocheting.
Additionally, there are many websites out there that have to do with knitting and crocheting. I just want to highlight a few. First, there is Ravelry, which is essentially Facebook for knitters and crocheters. I am on Ravelry for those who want to find me, I am Klevitan17. Ravelry is a great resource because you can post pictures of your items, find new patterns and talk to people who may be able to help you if you get stuck. Second, there is KnittingHelp, which is a great site of videos on how to do different techniques. Third, if you are looking for really nice patterns or articles on different techniques there is Knitty, which is an online knitting magazine that is published quarterly. Finally, if you are looking for something a little more subversive there is The AntiCraft, which also has a book out. You can also find many magazines about knitting and crocheting as well.
Ok, one last thing and then I'll stop babbling (are you still reading?). While you can easily get yarn at Michael's or JoAnn Fabrics or AC Moore, what you are most likely to find there is acrylic, cotton and acrylic/wool blends. These are all great and I happen to love being able to get cheap yarn. However if you go to a local yarn store (LYS) such as KnitOne in Squirrel Hill, you will most likely find an even larger selection of yarn in many different fibers. Also if you go to an LYS you can ask the people who work there to help you decipher a pattern or do a tricky step in your pattern. LYS's also ususally have knitting groups and classes.
That's all for now. Any questions? Please ask!