What's the best way for a beginner to go about learning to play the electric guitar?

[Gimpy Jenkins]

I'm interested in learning to play the electric guitar, but I have little-to-no knowledge of instruments and have never played one in my life. I plan to play mostly Grunge, (i.e. Nirvana, Pearl Jam, Mudhoney, etc.) so the guitar I buy should be geared towards that. I will likely have to teach myself how to play via instruction booklets/DVDs, youtube videos, etc. due to the fact that none of my friends or family play guitar. I will be playing mostly in my basement and in my dorm room. I have a budget of about $150.00, give or take. I basically just want to learn electric guitar as a hobby and take it from there if I get pretty good at it.

Here are some questions I have:

1. Is it better to buy an all-in-one starter kit or to buy a guitar, amp, etc. seperately? (recommendations would help a ton)

2. For the type of use and music I plan to play, is it more important to have a good guitar or a good amp?

3. What exactly is a distortion pedal, can I distort without one, and do I need one?

4. What's the best way to go when buying an electric guitar set for a beginner and what would you recommend for the best bang for my buck?

Any other comments and advice would be greatly appreciated, and I would love some recommendations of a good guitar or starter kit to buy from people who know their way around a guitar.

Thanks in advance.