ORIGINAL: carrellh
I think the original Titebond is supposed to be easier to sand than II or III. I do not think any glue (on balsa) sands very well. I swear I can sand the balsa from under the glue without affecting the glue at all. Titebond II is somewhat water resistant and III is more so.
If you have a Hobby Lobby (the craft store) in your area, they usually stock thin, medium, and thick CA. They usually have some balsa, basswood, plywood and other things that you might find useul.
Power tools
This little cordless screwdriver works great for model airplanes. My brother has it. It comes with a drill chuck.
http://www.amazon.com/Milwaukee-2-4-...797316&sr=1-12
This one is more powerful, bigger, heavier. It is cheaper, and was available at Home Depot when I was shopping. I had to buy the drill chuck as an add-on
http://www.amazon.com/DEWALT-DW920K-...797676&sr=1-24
A rotary tool (Dremel or other brand) with flex shaft attachment is nice to have
http://www.amazon.com/Dremel-3956-02...0798046&sr=1-4
I bought an IV pole from a medical supply company to hang the tool. With the height adjusted so the end of the flex shaft is about a foot from the floor it is pretty convenient to use. I can roll it around my work room easily.
I got the $99 class Ryobi drill press, disc/belt sander, scroll saw, and band saw from Home Depot. I use the sander and drill press more than the saws. For kit building they are really luxury items that see limited use. For crash repair (making new parts) the saws do come in handy. If a person decides to cut his own kit (from purchased plans or an original design) the saws would really be useful.
Carrellh, you get the good guy of the month award for all the good advice! Very true about wood glue. I've gone to wood glue for repairs and it reminds me of building kits as a kid and raised glue joints. A sanding block is important, even if it's a temporary sanding block of sand paper around a stick of hardwood. And even with a sanding block the joints can be tricky to get perfectly level.
And even though I've been using wood glue recently and would use Titebond on the next kit I'd build, I think a new builder would be better off with thin and medium CA. We wouldn't want to deny a new builder the opportunity of instantly bonding himself to his airplane

Seriously, you might as well get some experience with CA. It's fast and easy.
Wax paper or plastic? Both are great. The only reason I use wax paper is because it reminds me of building Guillows and Comet kits when I was a kid so it's simply a feel good thing for me, but I've use plastic and as long as it's taped down well it's fine.
I really suggest buying a little razor saw to go along with the X-Acto, it's an important tool. And of course you'll need a covering iron so you might as well order that now.