I'd like to start a local Craigslist-type website--where should I start?
The first place to start is to examine Craigslist and other services of this type to see what's missing. You don't want to reinvent the wheel, but you don't want to compete with an established player in the field without a competitive advantage--especially one owned by eBay!
Do some research to determine what people dislike about Craigslist the most, then see how you can solve that problem with your new service. As Seth Godin says, "Do the never." The technology and the development are all second to a sound business strategy.