This is an understandable concern, and it's no secret that kids do cost money no matter how you put it. The easy answer is that lots of people have had lots of kids before us, and they managed to get by. It's a question of how you choose to spend your limited resources.
I think few are lucky enough to not have to think about what stuff costs. As for the rest of us, there is a whole spectrum of choices. On one end, if you only want the finest and best and newest, then you should expect to spend horrendous amounts. On the other end, if you're frugal and thrifty you can get by almost for free, but for that you'll have to accept used clothes, used toys, and so on. And you could find yourself anywhere in between.
Let me try to address each of your points.
Food: Exclusively breastfeeding is common for the first many months, so that's essentially free. If you choose not to, then you'll need formula, and that's unfortunately expensive. I hear there's a lot of "coupon" deals in the USA, less in other parts of the world (your user profile page doesn't state your location). But here in Austria, our local drugstore has rebate offerings quite frequently and that is when we go buy stuff in bulk. Saves a lot. As the child gets older, he can gradually eat more of your normal food, so you don't have to buy all those super-special baby foods that are available. Regular food can work just as well, if you're willing to think about what you're feeding the child. And small children really don't eat very much, so it's not like you need to consciously buy lots more food (though that will change when the child gets older).
Clothes: This is a good place to save money. First of all, newborns/infants/toddlers grow so quickly that they don't "wear out" any clothes. That means there's an ample supply of only slightly used baby clothing. Check in your local area or, public billboards, yard sales and flea markets. We've also made some good deals on eBay! Some clothes may not be perfect, or have a small stain. But there's no need to spend $$$ on Calvin Klein sweaters for a 5-month old kid. Unless you can afford it of course, then it's likely a nice luxury.
Nappies: I guess you refer to diapers. Disposable diapers are expensive to use, but their benefit is that they require less time (no washing and drying!). However, if you have more time than money then cloth diapers can be a good alternative. I've seen personal finance blogs calculate this, even using homemade detergent to further reduce cost. The verdict is that cloth diapers are cheaper to use but require a time investment instead.
Medicine: A healthy normal baby requires no medicine at all, except for immunizations if you choose to. Health insurance goes into this category as well, but often babies are insured through the mother's policy. Perhaps a nose spray against the common cold is needed now and then, but that shouldn't bust your budget.
Startup costs: As with clothes, it's amazing what you can find used. Beds, sheets, toys, anything and everything. Check flea markets in your community, and take a look in eBay (perhaps within driving distance?). Be sure to check that the items are safe to use and not broken or damaged. Some items might be no longer permitted (like older car seats), and that's something you can research in advance. In this category in particular, the rule of "less is more" applies: no child needs an entire room full of toys (many babies are even more interested in the "real stuff" like plastic bottles, old newspapers, boxes, etc. so they do not necessarily need much special "toys") and baby accessories. Just get the barest essentials and add on that as you go along. It's a lot easier to pick up more things than to get rid of things spent money on and realize you don't need after all.
The baby will cost exactly as much as you care to spend. The actual figures vary greatly -- based on your region, income, standard of living, and more -- so it would not be meaningful to state any precise amounts.
PS: Oops, I just wanted to jot down a few thoughts, but now see what happened. Sorry! :-)
A Visual Guide to Saving Money with a Baby goes into detail about the economy of using cloth diapers and also mentions food, toys, and accessories. That blog is a gold-mine of money-saving tips, by the way. Highly recommended reading for anyone who thinks about personal finance.