I'm no builder, but I can try to answer a few of your questions. I've thought about doing something like this before so I've read quite a bit about it.
1) I've heard cedar and pine are not good woods to have around reptiles (in the form of bedding, anyway). Just to be on the safe side, I would avoid them. The oils in them can be poisonous and it's better to be safe than sorry. Basically, it's best to avoid 'soft' woods. (I might sound like a noob for saying this. I'm not sure if those woods are even used in construction much. Oh well, I try.)
2) For lighting, I would use those long flourescent-type bulbs. I have a cage from boaphile and it came with a light just like that, it's really handy and it looks great. You can generally buy them in any pet store for pretty cheap. Looks like this: http://www.bitsforpets.com/images/zo...ight-image.jpg and it shouldn't be hard to find the housing at a pet store or a website that sells the lights, try zoomed.com.
3) For heating, I would go for some plain old heat tape or heat rope, that's probably the cheapest thing you'll be able to get in the quantity you need.
Flexwatt heat tape: http://www.bigappleherp.com/Flex-Watt-Heat-Tape
at the bottom of this page, heat rope: http://www.reptiledepot.com/ut_heaters.html
Do some looking around and see what you can find for cheap. By the way, if you use this, you'll need a thermostat to control the temperature. These people are my favorite: http://www.spyderrobotics.com/products/herpstatpro.html
and you can look at zoomed as well.
4) As far as home-made decorations go, I think as long as there aren't any toxic, 'fume-y' substances involved in its construction and as long as there aren't any sharp edges, it should be fine. My brother made me a snake hide out of clay with some felt glued to the bottom for grip, and he painted it and glazed it. My snake's been using it for well over a year and he's fine, just wash it off to be sure nothing toxic is left on there.
Lastly, I think you should definitely check this site out, I think it's right up your ally: http://www.arbreptiles.com/cages/tips.shtml
:-D Have fun!
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