These are the costs involved in getting a script to the point where it is ready to be shot. Matters that may have to be budgeted for include the price of purchasing any story rights and the salaries of the scriptwriter, producers and director. Another potential expense to be considered here is the use of a casting agency or the cost of organizing your own casting calls.
The term "above the line" refers to the talent that goes into making a film, and all their attendant expenses. This includes the salaries of the cast and the crew --- for instance the cameramen, lighting and sound technicians, set designers and builders, hair and make-up, and additional costs such as catering, accommodation and airfare. Also to be budgeted for here is the price of buying or hiring any cameras, microphones or lighting equipment, plus film stock (unless shooting on video).
"Below the line" costs cover the film's post-production. This includes matters such as editing, music --- either the salary of a composer hired to write an original score or the cost of the rights to previously recorded pieces --- additional sound, computer-generated effects, title sequences and laboratory work on the film stock or digital footage such as color balancing to give it a coherent look in line with the director's vision.
These are costs which aren't directly associated with making the film, but which are nonetheless important. Before beginning shooting, you have to take out insurance to cover the cast and crew and any locations you might use. It is also sensible to budget for publicity -- creating a website, printing fliers, burning DVDs. This will help you to either market the film yourself or bring it to the attention of a distributor. Lastly, it's essential that you should set aside a contingency fund in case anything goes wrong.