www.rfactor.net or www.rfactorcentral.com for the SIM (around $55).
In the 'Community' section at www.rfactor.net there is a short list of sites where racers hang out. Apart from my own site (www.maddogracing.info) I hang out mostly at www.ausfactor.com, or a couple of the other community/team sites.
As much as it is possible to compete with an Xbox or PS2 type controller, a wheel and pedals gets the best result. Like most my first wheel was a Logitech Momo, then stepped up to a Logitech G25, but any wheel setup is pretty much required to get the most out of the sim (it's a simulation, not a game, as such).
'Yap' is another club 17 member who hangs out at AusFactor, and races this.
Apart from the two V8SC mods (V8Factor & FVRV8), we race everything from Catterhams, Minis, Clios, and open wheelers (F1/Champ/F3) to Nascar, and even go-karts and sprint cars. There would be close to 150 mods for rFactor, with one of the latest being 'Bathurst Legends 1969', including the entire field of GT & GTS entries from that year.