sand should be fine, but once you set it up it might remain cloudy for a couple of days up to 2 weeks depending how fine the sand is and how well you wash the sand beforehand. there should be something you can buy from your lfs to add to the water so that the small particles floating around settle much faster, forgot what its called.
as for canister filters, a nice and cheap one like a fluval 404 or xp3 would do the trick, but if you have extra money to throw around get a eheim, best filter you can get can enevr go wrong.