Question: I want to buy a good all-purpose Chef's knife and also sharpen it myself. But I have no experience sharpening with a waterstone so I'm a little afraid of spending much money and then ruining the knife. What is the most basic type of knife in terms of materials and style which would allow me to effectively practice sharpening?

Answer: 
While you can learn how to sharpen on almost any straight blade knife, my recommendation is to start on one that:

* Isn't expensive, (try yard sales, thrift stores, and pawn shops - the goal is to learn technique, not have a fancy knife)
* Isn't very long, (6 inches max)
* Is wide enough that wearing the blade away won't be a big issue, (chef's knife would be fine)
* Is not too thin or too thick, (not a boning knife or a meat cleaver)
* Is a softer typer of steel, (so that you will sharpen more frequently, and so it will be easier to grind back the edge if needed)
* Doesn't have a great finish (the finish is the part that you're most likely to mess up beyond easy repair).

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As far as sharpening tools go, I think you need several grades of whetstones to really get a great edge. You can buy them separately or as part of a kit. I would skip any other type of sharpener, even a honer for now (again, so that you'll be forced to practice resharpening more often).

Then it's a matter of practicing sharpening and testing the edge. Make really sure you get your technique down before trying to add ANY speed. Make sure your fingers are NEVER in the path of the blade. Work from roughest to finest whetstone.

If you mess up on the whetstone angle, go back to the roughest stone and regrind to a fresh edge.

Your practice knife will get scratched up and worn down faster than normal. When you're comfortable with your skill, get a slightly nicer knife and a honing steel.
For the second purchase, get a reasonably traditional japanese knife (eg a user-quality kurouchi-style santoku/nakiri, should be $40 to $80. Made from a japanese carbon steel like SK-anything, or yellow or white paper steel). 

The reason being that these are usually not shipped with a factory edge meant to be used as-is - putting the knife into use starts with sharpening it. 

The steels mentioned are hard but not hard to sharpen, and can take and hold very acute edges if you want to experiment (down to 10° per side should still be usable for light duty), and you can be confident that the steel does not limit the sharpness you get, only your skill does.