I started with the '91 black box/red dragon basic set... $5 on E-Bay.
Dungeons & Dragons game D&D AD&D 1991 black box - eBay (item 120525488302 end time Feb-08-10 07:58:39 PST)
I really think the idea of a "Basic Set" only works when you build vertically, rather than horizontally, upon it. In other words, it worked for BECMI because later suppliments covered higher levels exclusively and didn't add any more classes, races, etc. The Basic set was of value to anyone looking to play, even casually, and didn't become worthless even when you got serious.
As much as I like the idea of recreating the red box experience and/or having an inexpensive, self-contained entry point, I just don't think it's the right approach for the current game.
But that's pretty much what they're doing with D&D essentials. Start with the red box, then move on to whatever essentials path you wish to follow (player or dm or both.)
Don't the essential players books add new races, classes, builds, etc... along with higher levels?
I recall three, but they weren't called "Starter Set" --Also, is my recollection of two starter sets during the 3e era correct?