I have heard there is some sort of spending limit per team for materials. What has the typical material cost limit been?
In 2004, the maximum amount of money that could be spent on labor/parts for the robot was $3500 total, $400 for electronics, and a $100 maximum for a single electronics part.
Regular prices, not special discounts are used to count the total.
Though there is plenty of vagueness in this part of the rule, as I understand it, any part manufactured, at least in part, by a student does not count towards the total (beyond the cost of whatever it was made from).
The quick answer to your cost question is $3,500 for any additional items you purchase beyond the kit of parts. For a complete and detailed answer read sub-section 5.3.2.1, Cost Limits and Accounting found in Section 5 - The Robot. This is part of the 2004 competition documents found at this link:
One disclaimer on the above–these are the 2004 rules. FIRST may choose to do something entirely different for the 2005 season.