A:You won't need much? Sleeping bag, pad, camera, clothes, much more - unless you strictly stay in hostels. It's going to add up. And you won't be happy with a pack; that's too uncomfortable and awkward.
Ideally you start with a touring-style bike a road bike with the gearing and geometry to make a long trip comfortable, plus lots of braze-ons for mounting racks. In the U.S., the Trek 520 ($1,250; trekbikes.com) is a classic of this type, with a comfy steel frame, triple chainring, and sturdy wheels and tires. Over there, see if you can find a built-up Bob Jackson Super Tourist. A complete classic. Expect to pay maybe 700 euros for a used one.
Then, for a moderately light load, you first need a rear luggage rack. If you can find a Jandd Standard Rack ($48; jandd.com), get one. Then add a pair of moderate-size panniers. Ortlieb (ortlieb.com) are the best; they re fully waterproof and very tough. Their Back Roller Plus (about 70-75) have 40 liters of capacity, double as day packs, and are readily overstuffed or collapse down if you have excess volume. They will have plenty of room for your sleeping bag and other stuff.