[Si Coe]

If you are used to 1/8th anyway I'll assume you have some driving experience, in which case most of the RTR stuff will leave you a little cold to be honest. The electrics are well below the level of race quality stuff and will need completely replacing in order to upgrade.

The best bet starting out is probably a used B4. B4's account for most of the grid in the 2wd class (and most of the rest are X-6's which are converted B4s) so there are always a few going second hand. They are tough and durable so the used nature need not worry you, and they can be had for around £60-80, normally with a few spares.
Electrics wise your 1/8th radio gear will work, you just need a motor and speed controller. The Hobbywing Ezrun brushless system, which can be brought off Ebay for around £70 is far and away the best value for money system out there. You'll be wanting a proper sensored system eventually, but the Ezrun will easily see you through your first season and beyond. The 8.5t is the most suitable for 2wd.
There really isn't a good reason not to start with Lipo batteries from the off. For a start a decent 4000mah+ Lipo will run a B4 for 2 rounds without recharging, and can be topped up at any time. That means you only really need 1 pack and a good charger, rather than 4-5 NiMH packs.

Best bet though it to get down to EPR and speak to the guys there.