Oscilloscope

An oscilloscope is the critical tool for viewing electrical waveforms. One of the most challenging things working with circuits is that you can't visibly see what they are doing. The oscilloscope is the tool for making the waveforms visible. 

http://www.pdamusician.com/dpscope/index.html

$80 oscilloscope... 2 channels, 1MHz Analog Bandwidth, great for audio and breadboard circuits

Digilent $100 student oscilloscope:

http://www.digilentinc.com/Products/Detail.cfm?NavPath=2,1040,1043&Prod=ANALOG-DISCOVERY