First: There is still a lot of information that has yet to be released about Huxley, so we don't really know if the only way to get weapons/armor is through money. We actually don't even know how the money system will work at all. Only that you'll be able to buy/sell with other players and NPCs. It's safe to assume that you can buy weapons and your vehicles with money, but just the same we can assume that there could be mission rewards that include weapons and armor.
Second: Yes you level up. We're not completely sure of all the things you get as you level up. You, get things called license points which you can spend on acquiring the use of new weapons or vehicles and things like that.
Third: Level cap is currently 50
I suggest you read some previews about Huxley if you're interested, they have lots of good information that always gets me excited about the game. Pretty much every major gaming site is bound to have something Huxley related. Here's a few from gamespot
Huxley Updated Impressions - Combat, Skills, Characters, and Cities - PC News at GameSpot
E3 06: Huxley Impressions - PC News at GameSpot
Huxley Q&A - Settings, Factions, and the Basics of Huxley - PC News at GameSpot