Here is a fantastic group of articles on the pros and cons of different printer set ups, paper, and such for button making (and lots of other information and resources for button makers in general on the rest of the site). It won't tell you what to use, but it will make you a more informed buyer and it is great because it is from the unique perspective of a button maker with a physical store who has been doing this for many years.
http://buttonmakers.net/blog/category/paper-and-printers/As for myself, I am looking to upgrade my printer, however I am currently using an HP Photosmart C4650 to print my images. It's not perfect but it was under 100 dollars and it was what I could afford to start up. I think my buttons come out great, and I have heard good things from sellers as well. What you /will/ want to invest in for sure is very bright, high quality paper made specifically for your printer. I invested in some HP Bright White InkJet Printer Paper (And I used the matching color profile setting on my printer when printing) and I noticed an immediate improvement in the crispness, brightness and color value of my buttons. Paper really makes the graphic stunning, not just the printer! ^_^
To answer your question about displays, I have seen several methods uses, but what I plan to use (because as a buyer I like it best) is to make a stand up board out of cardboard, cover it/ (or pad it and then cover it) with fabric and on there you put one of each of your buttons so people can see clearly each design and can decide which they want to look for in the bins beneath. In front of the board at the bottom you keep one (or several) of those clear plastic bead separating trays with 32ish small compartments and in each one store one design of button. Just cut off the top. You can still close it after, just cut the hinge to make it easier to use the bottom tray for display.
http://thinkcrafts.com/files/2008/09/zen1.jpgYou can get these from the craft section of walmart. The trays only hold about 5 buttons or so in each small compartment (leaving finger room for people to grab them out) so you will have to replenish them as you sell them, BUT it makes them available to customers to select themselves (I for one am too shy to ask to buy stuff out of cases and will walk past such items). This method also keeps you from putting large amounts of buttons out at once, without it looking like you are /trying/ to keep minimal amounts of stuff on the table (since people can clearly see that the compartments do not hold very much and thus look "full"). It also makes it look like you have a lot of designs available because the trays spread your buttons out over the table.
I've only been doing this for about 5 months, but I really hope I was able to help you ladies out! ^_^