A DC is on the need-to-purchase list. I'm still in the process of acquiring what I need for a functional shop. Any suggestions on one that would be appropriate and budget friendly for a small home shop? I'm really tired of cleaning out my shopvac...
When you're really ready to get into it, you may want to consider starting a new thread on this very question. Just be prepared for information overload and the usual conflicting but passionate opinions on certain specific topics. I take dust collection quite seriously, but nowhere near as serious as Bill Pentz and fans!
Budget wise it is hard to beat the price of a Harbor Freight DC, though I'm no particular fan of HF (especially with regard to power tools), but they do have quite alot of fans (no pun intended) on this and other sites. If you go with a bargain-basement HF, make certain it has 1-micron filters (or find suitable aftermarket filters), so figure that into the price, if necessary. I prefer to invest primarily in mid-level quality tools myself. Personally, I own an older model 2HP (true 2HP) JDS Cyclone-II model DC which, brand new, sold for about $900 4-5 years ago.
I believe the optimal 'budget' cyclone for a home shop is the 2HP Cyclone DC and there are a number of quality options of this class in the $800-1200 range. However, if the budget allows for it a 3HP Cyclone is really the end-all be-all for the home shop -- this size cyclone will accommodate just about anything you might ever want to do in your home shop up to and including accomodating a larger workshop down the road -- but they cost a good deal more.
A good 2HP Cyclone with 1-micron filtration will have adequate CFM (even with 10-15ft of flex hose) for most of the typical home workshop power tools. If possible, running 6" hose will improve that even further and a 2HP Cyclone can make full use of those extra 2" versus a 4" hose.
If on an even tighter budget you can go the route of a portable single-stage (bag-style, though the top bag may be replaced with a pleated filter). These have the disadvantage of passing all waste material through the impellers which can be problematic if you accidentally vacuum a large cutoff or, worse, a steel tool, which can damage the impeller at worst or create a heck of a racket at the better. This style is also typically more work to empty bags and, in the case of true bag filtration (i.e. no pleated filter) tend to clog the bag filters much more quickly which greatly reduces the DC's available CFM. This means regularly beating the bags to break up caked on dust and occassionally washing the filters (if appropriate for the bag material). Just be advised that, IMHO, most woodworkers who initially settle for a single-stage DC ultimately dream of upgrading to a Cyclone within a few years (if not sooner).
Cyclones are typically more efficient at moving large volumes of air and do so at greater static pressures (which helps to offset duct and hose losses) and they excel at concentrating all but the very finest of dust in the primary waste canister, greatly extending the life and efficiency of their exhaust filter. Typically you will want a cyclone that is about 1/2HP or so larger than a single-stage DC to offset losses in cyclonic seperation -- the extra 1/2HP will give you slightly greater CFM but the cyclone will be able to develop more static pressure and maintain greater filter efficiency and life versus a comparable single-stage collector more than making up for the cost of that extra 1/2HP. Conversely, intalling a Thien-style pre-filter ahead of a typical single-stage dust collector likely steals close to 1/2HP from that style DC while also reducing the available static pressure due to losses incurred in the Thien seperator -- which is not to say that a Thien-style upgrade is not a good idea when using single-stage DC's, as it most certainly is. Basically that extra 1/2HP I recommend (e.g. if you would use a 1.5HP single-stage DC, opt for a 2HP Cyclone DC) makes up for the Cyclonic seperation losses while paying other positive dividends as well. In contrast, if you would use a 1.5HP single-stage DC but intend to add a Thien seperator ahead of it, you should probably also add an extra 1/2HP to that single-stage DC (i.e. a 2HP single-stage) to offset the losses imposed by the Thien seperator while maintaing the desired static pressure.
While investing in a good dust collector, it is also an excellent time to investigate ambient air filtration units. Even the best hobbyist-grade DC is going to miss some dust (our tools just are not optimized for the best possible dust capture) and this is what the ambient air filters will remove from the air. While it is best that dust be captured by a DC, thus ensuring that you will never breath in that dust, the ambient air filter will quickly remove from the air the dust that does escape, significantly reducing your overall exposure by greatly reducing both the concentration of dust and the duration of that concentration the operator is exposed to.
When investigating ambient air filtration units, please beware that some units (e.g. Jet and others) list their maximum CFM WITHOUT the installation of filters while others (e.g. JDS) list CFM WITH clean filters installed. The clean filter losses typically amount to about 25-30%. My JDS 750-ER is rated at approximately 750CFM (again, WITH filters) and is directly comparable to Jet's similar unit which they rate at 1050CFM (again, withOUT filters) -- the two units have very similar specs and effectiveness, but at first glance that 1050CFM claim can be very misleading to the uninitiated. When calculating air exchanges per hour for an air filter model you are investigating, the only number that matters is the FILTERED CFM specification (so subtract ~28% from the unfiltered value if the manufacturer does not provide this number).
I hope this has answered some of your questions and, hopefully, brings to mind some new questions. Everyone here at NCWW will pretty much go out of their way to help you when it comes time to decide -- all one need do is ask!
Good luck!