If you have a power (belt)sander that will really reduce the time needed to make the sword.
I have used a wood rasp and then sanded by hand, but that takes some time and elbow grease!
Home Depot or Lowes has a good selection of Poplar and Maple wood. I would suggest buying that type of wood, as the grain is really small, which means after you paint you can't tell it's wood. The 1/2" thick pieces look the best, IMO.
Post pics when you complete it! I would love to see what other people do with the rusting technique.
I've thought about picking up that rusting kit from Michael's several times. How much of the product gets used to make that sword? How many swords do you estimate that you could rust with a single kit?
Amazingly enough very little product gets used when you make a sword. I would make a rough estimate 8-12 full sized swords out of the kit. Keep in mind that is a rough estimate and it depends on how liberal you are with the activator and iron based paint.
I put on a coat of the iron based paint with a piece of sponge, shaking the bottle as I put the sponge over the mouth. This will get a nice mixed blob of paint on your sponge. Then I just dab the paint over the wood piece.
After the iron based paint has dried I apply the activator with a small chip brush.
I am pretty liberal with the activator and paint, I feel it give the piece a more realistic old rust look and feel to it.
Try to go to Michaels with a 40-50% off coupon and your golden! Get a great product for a reasonable price.