So, how does this thing actually work? Does one person buy ALL the shite, or do people usually bring their own instruments? When you have only the PS/Xbox/whatever + one instrument (yours) can you play at all? And how "realistic" are they instruments? From what you said about the drum-kit it seems pretty much like a regular virtual drum-kit set, which is good. But what about the guitar or bass?
Well, I have lots of money and moochy friends, so I just bought the whole kit. It would really depend on your situation, but splitting it with housemates or the like seems like a great idea to me.
The other thing is that the pricing structure is uh... different.... in places that aren't North America. There's some discussion about it starting around
page 3 of the RB1 thread, someone not me would have to recommend the best way to go about buying it.
Moving on... Yes, you have a bunch of options for playing single player, a few competitive game modes for two players, and then a few different ways to play as a 2-4 player band.
If you're looking for something realistic, your best bet is real instruments.
They are games, plain and simple.