I want to buy a good all-purpose Chef's knife and also sharpen it myself. But I have no experience sharpening with a waterstone so I'm a little afraid of spending much money and then ruining the knife. What is the most basic type of knife in terms of materials and style which would allow me to effectively practice sharpening?
While you can learn how to sharpen on almost any straight blade knife, my recommendation is to start on one that:
As far as sharpening tools go, I think you need several grades of whetstones to really get a great edge. You can buy them separately or as part of a kit. I would skip any other type of sharpener, even a honer for now (again, so that you'll be forced to practice resharpening more often).
Then it's a matter of practicing sharpening and testing the edge. Make really sure you get your technique down before trying to add ANY speed. Make sure your fingers are NEVER in the path of the blade. Work from roughest to finest whetstone.
If you mess up on the whetstone angle, go back to the roughest stone and regrind to a fresh edge.
Your practice knife will get scratched up and worn down faster than normal. When you're comfortable with your skill, get a slightly nicer knife and a honing steel.
What about using the list of criteria developed in an earlier question and sharpening not with a waterstone, but with something easier for a novice sharpener to understand? Two-stage sharpeners like this one from Wustof (but there are many more options beside, just google 2-stage sharpeners, this just happens to be what I own) make it difficult to get your angle incorrect.
Another option would be to get a guard for your waterstone.
While you can sharpen cheap knives with any of the above techniques, unless you have a knife that holds an edge you won't really notice a difference. A cook I know tried to sharpen a fairly beat up, fairly poor knife with a 2-stage sharpener and it made no difference. Sharpening my higher-quality home knives with one helps immensely.