Definitely get an acoustic, and not an electric guitar. There are two basic types of acoustic: with nylon strings (also known as "classical guitar" or Konzertgitarre), or steel strings ("western" guitar). Nylon-string guitars are used for playing classical and flamenco, but are also very good for beginners. The neck is a bit wider than for a steel-string guitar, but the strings are much easier on the fingers.
Price range: You may be able to get a new guitar for around EUR 100 - 150. Maybe even EUR 70 if you find a bargain. I've seen beginner's guitars for that price at Lindberg in the Sonnenstrasse, and at Music Shop in Hanauer Strasse. Haven't been in either place recently though. Of course, for that price you'll be getting something fairly basic, but once the person has been playing for a year or two, they'll have a better idea of what kind of guitar they really want, and will be in a better position to spend their money wisely on an instrument that is right for them. There are also good second-hand guitars around, but I'd be wary of buying one if you don't know a lot about guitars.
Something that may make a big difference for a beginner is the height of the strings above the frets. A height of 3 or 4 millimetres at the 12th fret should be OK. More than that, and the instrument will be difficult to play. Less, and the strings may not have enough room to vibrate when played loudly. The height of the strings (the "action", to use the technical term) can be changed by making adjustments to one or both of the little (usually white) pieces that the strings pass over at each end (at the "bridge" and the "nut"), but you shouldn't fiddle with this yourself unless you really know your stuff. If necessary, the people in the shop should be able to do it.
Accessories:
A guitar bag or case is essential. You can get a flimsy soft bag for around 15 EUR, but all that will do is keep the dust off. It won't give any protection against knocks. You can get a good sturdy, well padded bag for a bit more. Often they have an arrangement of straps that allow you to carry the guitar on your back, like a rucksack. I never carry mine that way, but some people seem to find it practical. If you want to get professional, a hard guitar case will offer the best protection (prices start at around 70 EUR).
Someone mentioned pitch pipes for tuning. I have a set of these and find it difficult to tune my guitar to them. My ear just isn't practised enough. What I would recommend is an electronic tuner. This is a little gadget with a display that shows you whether each string of your guitar is tuned to the right pitch, or too high or too low. Price around 15 EUR.
As for shops, any shop selling guitars should have something suitable for a beginner. The big stores like Lindberg and Music Shop will have a large selection, but if you go to Music Shop, don't let the salesman, Roland, try to talk you into spending 50% more than what you had budgeted, for something far beyond your requirements.
You might be able to pick up a bargain at a shop called "Folk Laden", in the Einstein Strasse. (They used to be at Weissenburger Platz, but they moved a couple of years ago.) Don't remember the street number, but it's close to the intersection with Grillparzer Str., on the north side of the street, heading toward the town centre from Grillparzer. I pass by there often and they always have a large selection of guitars, with a few bargains in the window. The shop owners are nice and friendly.
QUOTE (Janx Spirit @ Jun 25 2007, 11:39 am)

The Chinese are now doing some really good copycat guitars at a fraction of the price of the originals. Of course not as good as the originals but nevertheless pretty good for the money.
I think they've been doing guitars for a long time. I have one which I bought second-hand from a friend, who assured me it was over 20 years old. Nothing fancy, but it has a very nice tone.