To play Manouche Jazz (the word "Manouche", as it is used here, is synonymous with "Gypsy") --it sounds daft to say, but the first thing you'll need is a Manouche guitar. Not a Takamine, not a flamenco guitar. There are two main types of Manouche guitars, both based on instruments originally built and marketed by Selmer of Paris. The two types are distinguished by the shape of the soundhole: the oval (also called a "petite bouche", "Modele Jazz" or a Selmer), and the D-shaped (often called a "grande bouche" or a Maccaferri). The D-hole, designed by Italian luthier and classical guitar virtuoso Mario Maccaferri, was marketed first. After Maccaferri parted ways with Selmer, his designs were revised by Selmer employees, and the oval-hole "Selmer-Maccaferri" ("Selmer" for short) instrument came onto the market.
The oval soundhole model (usually made with a 670 mm scale length) is better for soloists. The sound is more directionally focused, and the longer scale length gives this guitar a cutting, trebly sound. The D-shaped soundhole model is traditionally used by rhythm guitar players--the sound is omni directional, and the shorter scale length means lower string tension and a more balanced, slightly "bassier" tone. As for cost, prices vary widely: from 300 euros ($400 U.S.) to several thousand euros. Two main market categories exist: factory-made guitars and hand-made guitars (those made by luthiers). The best guitars are usually hand-made, but some factory guitars sound good enough for beginners and those with limited budgets. Some players will argue that it is easier to learn on fine guitars...ultimately, it's up to you. I have a Rudy Larna factory-made guitar that's worth 300 euros. While it is not a great instrument, it is fine for now, since I'm in a learning phase.
Strings are the second crucial element to getting a traditional Manouche Jazz guitar sound. Most players use silver-plated copper wound strings, which today are manufactured specifically for this style of guitar. I personally recommend the Savarez Argentines, but other brands with a good reputations include Galli and John Pierce. I've only tried Argentines, so I'm unable to say anything about other brands. You should be aware of the fact that these strings come in different gauges: .010-.045, .011-.046, or .011-.047, with either loop ends or ball ends. The .011-.047 set will exert more tension on the neck, and you should ask a specialist whether or not you guitar can withstand this extra tension (usually it's fine). Price varies between 7 and 18 euros per pack. It's recommended that you buy a few extra single G strings, because they are more prone to break than the others.
The third key element for playing in this style is the pick. Manouche players tend to use very thick picks--between 3mm and 7mm (0.2-0.4 inch). These are made from various materials, including plastic, wood, turtle shell (real tortoise shell, like real ivory, has largely been removed from the market for endangered-species reasons), bone, metal, and stone. Manouche Jazz picks also come in various shapes. Personally, I've tried 2mm, 3mm and 6mm picks in plastic, and I feel most comfortable with 2mm picks. Very thick picks usually have an asymmetric beveled edge, like mine in the picture. This helps to ease the attack (the angle at which the pick strikes the strings). However, though it's easier to start with, it increases the pick noise on the strings, which I don't like very much. These thick and asymmetric-edged picks are apparently widely used by the Dutch Sinti, a Manouche tribe living in the Netherlands. Price varies between 1 euro and 15 euros (and sometimes much, more depending upon the pick material).