Holy Cow You Are Toast!
I'm looking into building an LFS system myself, and looking through the 6.0 book, it seems rather daunting. If you download the LiveCD, you will have everything to build LFS, including the working environment. I know I am very new to Linux (14 days of actual experience) and I still find many things confusing. On that note, If your new (like me) don't do the build just yet. Read up on the prerequisites pages (and follow and read the docs that it links to) and make sure you understand EVERY WORD! Your first (and best) bet is to simply toy around with a free distro and then build only after you get the hang of the system. The best way to see if your familiar enough is this-
Ask yourself the following questions:
Can I compile a Linux Kernel from source?
Can I install new packages from the source?
If errors come up during said installations, am I able to fix them?
Can I run fdisk and cfdisk from the terminal?
Can I configure the X Window Manager from a command prompt?
Does ALL of my hardware work?
Does my day to day operation of my distro cause me any undue stress?
If you can honestly answer yes to all but the last question, you might just be ready for LFS.
Basically, you won't be ready until you can operate in Linux stress-free, or at least when it comes along you can fix the snag.
Heck, just getting iwconfig to recognize wlan0 AFTER installing the driver under ndiswrapper becomes a pain for me(at least in SimplyMepis 3.3 anyway), so I know I am not ready just yet.
Anyway, when you are ready, good luck building your first custom distro.