How long does it take to prepare an outfit?
In my experience, it varies greatly depending on the costume. I spent 11 months working on 8 costumes from Revolutionary Girl: Utena. On the other hand, I put together Kazuki from GetBackers in a day. A mid-range example would be my Phantasy Star Universe costume, which took about a month on and off. It really depends entirely upon what kind of clothes the character wears. Something from an anime like Beck or GetBackers where the clothes are relatively normal will take far less time than something from, say, Utena or Trinity Blood where there are a lot of crisp details.
what will I need and where to find it?
Again, it depends entirely on what you choose to make. If you are not good at sewing, you could always buy your entire costume from ebay or various cosplay commissioners (they will often custom-make garments to your measurements). If you want to sew it, you just need to figure out an approximation of what type of fabric is represented (I've gotten good at this if you need help), then to find the fabric at a fabric shop. If you've never sewn at all, you might want to choose costumes that can be assembled from pre-made clothing, or that just require simple sewing until you become familiar with sewing techniques.
I get a lot of things (especially shoes) from thrift shops and second hand stores. My wigs come from Ebay or Amphigory. I can link you to some good ebay sellers if you'd like. Be warned: wigs and shoes will easily cost as much as the rest of the costume. This often freaks people out, so they skip wigs and proper shoes, which ruin the costume. Nobody wants to see, for example, a Yuna cosplayer with oily, curly hair that's halfway down her back. We want to see the Yuna we know, with her smooth, straight hair. In general, wigs are preferable to actual hair, because anime and game styles are so unrealistically full. I make two exceptions with my costumes - Haku from Naruto (because updo wigs are hard) and Kazuki from GetBackers (I merely add an extension to my own hair).
what must I do to look cute and not ridiculous?
Get into character. Smile, and pose, don't just stand there. Basic posing skills help - practice in a mirror. Try not to be too self conscious. This is just another way of playing dress up and you should have fun with it.
Some tips I have for looking better both in person and in photos:
-Wear makeup. Whether you are male or female, it will even out your skin, define your features, etc.
-Stand up straight. Most people don't realize how bad their posture is until they actually stand up straight.
-Make sure you keep your head up! Your face and neck will generally look better if you are not staring at the floor.
-If you are overly self-conscious about weight, etc, try getting some posture support tops and things to wear under your costumes. These generally make you look slimmer which will give you more confidence.
-Wear something body-appropriate. If you are heavier, do not wear a bikini type costume. The same goes if you are skeletally thin. XD No one wants to see lots of flab OR every bone in your body.
-When someone takes your photo, POSE. Do not just stand there. Pick out some in-character poses and practice them before you go. I can't tell you how much that helped me out. Now I'm better at posing on-the-fly and I rarely have to practice before hand. With groups, though, we will pick poses before hand so that we all look our best in photos.
-If your character is angsty or sad, don't always look that way in photos. Practice doing small smiles and stuff to soften your features for photos. You want to look in-character, not necessarily like you are really grumpy!
Hope this helps at least somewhat. Feel free to ask for sewing tips, pattern alteration stuff, wig styling, or anything really, once you pick a character.