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These are the solutions I recommend to my clients:

Easiest to implement
Foxycart
Video: http://css-tricks.com/video-screencasts/45-using-foxycart-for-ecommerce/

Volusion
http://www.volusion.com/

Zen Cart
http://www.zen-cart.com/

Magento (free open source, big learning curve though)
Enterprise level (without the enterprise cost)
http://www.magentocommerce.com/

Any designer/developer you go with should be familiar with all of these e-commerce solutions. Don't let them nickel and dime you for stuff they didn't even build. Imo, go with the designer that seems most transparent and honest.

-Evan

Doesn't ebay allow you to sell on their site as well as your own?

You could start with that then examine options mainly your own website and store.
Having your own website would give you more control in the sense of being able to expand or modify it considerably if need be.
Further you would get the advertisement revenues, whereas if you were selling from someone else's store it would mean sharing the revenue, which normally favors the store owner.
Of course running a website is a major exercise.

http://www.vistasads.com

www.fastcommerce.com is the best plus the first 50 products are free it gives you everything you need even your ownback office even the option to give out coupons it's one of the best.

akgold, you know it is almost 2 years since you posted the orignal question.
Could you share your actions and learning with us.

http://www.vistasads.com

1. Yahoo Store- Its $40.00 a month (basic, more for unlimited) and transaction fees at about 1.5% or more depending on plan. The provide you the payment gateway and everything which can be worth it if you want more professional. I believe they offer paypal service and all other payments. Also they provide you with sitebuilder so you can add your buttons and cart system.

2. Paypal is good to have, its popular if you are thinking of step 3 which is ebay and they also provide carts. There is also google checkout.

3. Sell on ebay can be good because the web traffic is there for you, its tough marketing something new like a new site because you have to get listed and build recommendations.

4 and 5 can be difficult if you aren't a web developer. Like I said its hard to build from scratch to even though the website is finished marketing is the hardest part.