This is both a philosophical question as well as an emotional one. Two questions need to be answered. First, what type of flying do you want to do? Second, within the bounds of the first question, what aircraft excites your interest enough to spend several hundred hours and several hundreds if not thousands of dollars building a simpit? As an example: if you want to replicate airline flying, then you're going to get a lot more flying action in terms of landings and takeoffs by replicating a 737 or the like. Narrowing this choice down further, you can also assess your budget. If spending on the low side, what cockpit is easier to replicate on the cheap? If getting spendy, how much is available in terms of flight sim products to flesh out the gear that you'll need for realistic operations?

My own situation can help illustrate. What kind of flying? Bush flying - exploratory sorts of stuff. Point to point, but in a hurry. There's no such thing as a "bush jet." I don't mean a jet that can land on an unimproved strip. I mean a jet that can land on the same sort of crap that a Twin Otter would find comfy, low stall speed and all that. No such animal exists. No problem. X-Plane gives users very easy access to accurately designing an airframe/power plant combination that can handle such conditions. So the what kind of jet thing here is whatever I want that fits the mission, as long as I can design something that flies appropriately. Cockpit style considerations come up next, and since I have limited space and hate "half cockpits" that only replicate the left seat, I've gone for more of a fighter configuration, the front seat of a tandem setup. Of course, here things get really easy for me, since I can design and build whatever appeals to me with complete artistic and engineering freedom. Glass cockpit? No problem. One can do lots of clever things within the X-Plane instrumentation scheme, and there are aftermarket software solutions as well. Do I feel like using a Thrustmaster Cougar instead of a yoke? Equally no problem. In short, I've adapted the cockpit I want based on a completely logical chain of decisions. At this point I now "get smart" about the sorts of systems that would be in an aircraft with equipment similar to what I've conjured up from my insane imagination. That's how I design all my own control panels, and I lay out the cockpit both by determining what's been done in a similar real world cockpit as well as what makes sense to me ergonomically. An excellent guide here is the F-16 layout, which is extremely comfortable and well thought out.

That's what worked for me. And whatever cockpit one builds, it should be both what they want and what they are capable of building in a reasonable amount of time.

Best simulation: X-Plane. Reason: More user extensible in aircraft creation, aircraft flying accuracy and in plugin based enhancement. It also scales down to older equipment very well. It's a bit of a frankenstein in some ways, but given it's capabilities I've found it to be the most flexible option in comparison to other sims like M$FS, FlightGear and the like. X-Plane is currently the only retail simulator still in active development. X-Plane 10 is predicted for Christmas release.

Best computer: Whatever you can afford (especially with X-Plane). My philosophy: If you're going to spend money, time and space on a cockpit, your first best buck is spent on your computers. Yes, computer(s). It's too inexpensive these days to not take advantage of the benefits of networking multiple systems. And these are the first arbiters of the quality of the ultimate experience. The thing to remember here is that no matter how pretty your cockpit is, if the view out the window sucks, you will very quickly tire of the novelty of your completed cockpit.