I agree that topwater flies are more fun to fish. I say it's a sickness, and openly admit I have that sickness and it's terminal. That being said, don't be intimidated by fishing undwer the surface because you'll tend to catch more fish that way. If you're looking to catch bluegills and sunfish, a great tactic is to use a small nymph (it doesn't have to be fancy to fool a bluegill) under an indicator. "Indicator" is a fancy word for a bobber in fly fishing terms. It's usually a small chunk of foam or plastic that floats well and attaches to your line above the fly. See the indicator twitch or disappear, fish on, simple as that. Simple streamer flies like wooly buggers and Clouser minnows can be casted out and stripped in to catch bass and crappies. It's not that complicated, either. You're bringing in the line by hand, strip by strip, you'll either feel the fish in your stripping hand take the fly or see the line twitch. Again, set the hook! :bouncy:
As for gear, I wouldn't break the bank, especially for the first rod/reel. As said above, you can get an adequate combo for under $100. I have been fly fishing almost exclusively now for the last 6-7 years and don't own a rod that cost over $200 (3 of the 4 cost me $110 or less). My reels are not much special, either. The "best" reel I own is on my 7wt I use for steelhead and carp, I wanted a good drag for the setup, and that reel cost me about $190. You don't need a $700 rod and a $400 reel to catch bass and panfish...or any fish, for the most part. The thing I would suggest spending a little more than the minimum on is the fly line. If you get a decent combo from BPS or Cabelas that line will most likely be good enough. The really cheap lines coil badly and make learning to cast a lot more difficult than it needs to be. I try to make sure I get a decent quality line (spent as much as $75 on a fly line for 2 of my setups) and keep it clean. If you're fishing it around here in Ohio you'll want to clean the line every few weeks or once a month, at worst, if you're fishing a lot. Fly line attracts a lot of water gunk, keeping it clean makes it float and cast better, and it's a cheap and easy thing to do. Kits only cost a few bucks and last a while. Some say they use Armor All on their fly line, but I have read about disasters using products like that on fly lines, so be careful!