Video has a very different feel from film. Chances are you won't be able to afford 35mm so the film choices will either be 16mm or Super 8. Super 8 used to be the best way to shoot a no-budget film but the times have changed. It's getting almost as expensive as 16mm and a lot harder to find labs and equipment. Unless you already own a Super 8 camera and editing equipment you'd be better off using 16mm.
Video is cheaper and easier to work with.
If you'd be satisfied just selling a dozen copies from your own web-site, you can use VHS Super VHS or Hi8, but remember, distributors won't touch anything shot on those formats. To make something you can actually get distributed, your choices are Beta SP or Digital video. Before making that all-important format decision, you should look into what equipment may be available to you. If it's not a camera you already own or can borrow, you'll end up spending a good part of your budget renting or buying one. You lose even more time when you have to change locations and re-dress sets.