My main rig for whacky-style is an old 6' Ugly Stick with an old spinning reel spooled with light fluorocarbon line (the only time I am usually whacky rigging is when I am casting under docks...) I just buy the Gammy finesse hooks. I have never tried the 0-Rings, but it's a good idea: when the fish are on, it's pretty obnoxious how many baits you will lose.
The reason I use what I use is simple: the shorter rod seems to make it a little easier to skip accurately under docks, the fluorocarbon is harder for the fish to see (though the difference this makes is arguable) but I also like that the Fluorocarbon line twists easily: when I fish with the whacky rig, I like to skip under a dock and let it sink nice and slow, and I watch that twisted line on the surface to detect a strike. If the line starts to untwist, I know a fish is running with it and I can quickly reel in the slack and set the hook.
If I am seriously fishing whacky on a weed line or something deeper, I switch over to my main worming rig and use that instead, but for the most part, it's just the cheapo rod and reel for my whacky rigging purposes...
*EDIT* Oh, and I use the 4" Yum Dingers for bait. They are small, but it seems that any sized bass will happily bite on these (assuming you have the right color of course... which seems to change about once every few hours on the lakes around here...) If I know there is something big, I will throw on a Ring Fry too. I have caught some really nice fish on those big Ring Fry worms...