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I used to work at a railroad-oriented hobby shop, so I answered lots of similar questions. You've got good questions, and more experienced guys in the hobby should be glad you're asking them. Our shop only stocked sets made by Proto 1000 (a better variety of Life Like product), Walthers Trainline, Athearn and Bachmann Spectrum (again, a better variety of Bachmann product). We knew we could stand behind these sets, and our customers wouldn't get frustrated with shoddy goods or poor performance In terms of scales, we handled HO, N and HOn30--we just didn't have much customer interest in the larger scales--especially for those with home layouts. For a starter set, I would suggest something with short cars and a short (8-wheel) diesel or short steamer. They look better on curves and are less likely to derail. Ask the hobby shop staff for their suggestions on the set vs. individual components issue. They might be able to put together an attractive package of individual items for you--we really got a kick out of doing that for customers. You might pay slightly more for individual components, but the advantage is you can skip the items you don't need and can get certain qualities (in track and power pack, or example) that won't tend to get "outgrown" if and when you build a big layout.
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