A. Most recent Core Set (M2010 at the time of this writing, but is expected to change in October 2010).
B. Most recent Block (Currently Shards of Alara, Conflux, and Alara Reborn. Expected to change October 2009).
C. Standard card pool (Includes the above cards, plus the second most recent block).
D. Extended card pool (Includes all the above cards, plus the 5 next most recent blocks, and their associated core sets).
E. The Legacy/Vintage card pools. (Includes very nearly every Magic the Gathering card ever printed).
Hopefully you see how this plan of attack is intended to build on itself, preparing you for an ever increasing field of competitive/casual events. As you take on a new group or level of play, it is also important to be familiar with the banned and restricted lists for that level of play, but they only become really important if you are considering a competitive event.
Learning the rules is important, but it doesn't have to be a job, just invest your time and effort with purpose, and you will be surprised just how much you can learn and how quickly you understanding will build. Back in my day the complete rules was literally a tiny book, about the same size as a stack of 15 cards, and you carried it around in your pocket. Today, technology allows people to carry much more information around in a variety of convenient ways. Just find something that works for you. It is also important not to underestimate the value of your greatest learning resource, the people around you. If you don't have other Magic players around you, that is something we are going to have to change, and will be the next topic we take on in this series.