I would keep your eyes open for a used frag tank of decent size. I got my 60gal deep blue (48"x24"x12") for $90 bucks and the only issue was it had some teeth knocked out of the overflow.
Flow is just as important as a Display, I use koralias for cost.
Tangs are great, but only should be had for a tank of large enough size. I have a powder blue in mine but thats simply because he is a rescue. A algae blenny can be used for smaller tanks.
Fish that go good in a frag tank as well are typical chromis, and even damsels. A six line or yellow wrasses are great fish for pests and add character to a tank, but make sure the frag tank is covered if wrasses are added.
I prefer NOT to connect it to the display for a few reasons. I plan to keep backups to my corals once they grow in my display, if the display crashes I will lose everything. I use my frag tank at the moment as a quarantine to examine new corals before they go into my display. Also, if you have a disease or parasite make it into your display for whatever reason at least the fish in the quarantine won't be infected. Sure, having the frag tank plumbed to the display is a convenience factor but I prefer if its stand alone.
I would get a skimmer and a ATO system for it, made my life easier.
Lighting can be easier since generally a frag tank is much shallower than a typical reef tank. I am looking into DIY led's with a couple of t5's, but I've had SPS do fine in a frag tank with only two t5ho's.
Barebottom is the best way to go, lets you clean the system nicely of any waste.
Waterchanges are just as important as a display tank.