In addition to computer equipment and software, you'll also need a good telephone. Caller ID helps by allowing you to screen out telemarketers or other calls you can't take at the moment.
A surge protector is necessary not just to give you additional outlets for your computer and its peripherals, but to protect your equipment.
You'll need a desk with plenty of workspace. It should have space for a computer, as well as room to spread out paperwork if necessary. A corner "L" shaped desk works well for this. Make sure the desk has a large keyboard tray that can accommodate your mouse pad and mouse, as well. Many computer desks don't have large enough trays. Don't forget about space for your printer, scanner, fax and other equipment.
Shelves, cabinets, and file cabinets are also necessities that help tremendously by utilizing vertical space and keeping things organized. You may also be able to use the tops of these shelves and file cabinets for your printer, scanner, fax machine, etc.
Also, don't forget to invest in a comfortable chair that offers good back support. It should have as many adjustable parts as possible to help it fit your body. Arms on the chair will also make it more comfortable, particularly if you will be doing some work other than that on a computer. For more information on setting up your home office visit About.com's Home Office Furniture page.