There are a few key reference books for paper money.
Standard Catalog of United States Paper Money, 13th edition, Krause Publications, by Chester L. Krause and Robert F. Lemke, costs about 22 dollars and contains 14,000 market valuations and 550 photos. If you're starting in most US paper, you want this book.
Standard Catalog of World Paper Money, Volume II, General Issues, 7th edition, by Albert Pick, Krause Publications. Costs about 55 dollars and contains your basic national paper money. 1280 pages and 10,000 black and white photos. If you're starting in world paper money, you want this book. The 7th edition came out in April 1994 and has notes up to around Feb 1994, which includes all of the new countries up to that point.
Standard Catalog of World Paper Money, Volume I, Special Issues, 7th edition, By Colin Bruce II and Neil Shafer, Krause Publications. Costs about 55 dollars and contains state, provincial, and commercial bank issues not covered in Volume 2. Has 1056 pages and 8,000 black and white photos. Massive.
Standard Catalog of Modern World Paper Money, Volume III, 1st edition, by Colin R. Bruce II and George S. Cuhaj, Krause Publications. Costs about 30 dollars and covers world notes from the last 30 years. It includes lots of stuff not found in Volume II (but presumably, there is some overlap). Has 600 pages and 5,000 photos ("hundreds not found in Volume II"), softcover.
Standard Catalog of United States Obsolete Bank Notes By James Haxby, you guessed it, Krause Publications. Costs 195 dollars and is the mother of all obsolete bank note books. Many of the states have their own books which are considerably cheaper. Check first before blowing 200 dollars on this 4 volume set. For instance, Rhode Island obsoletes are covered by the excellent book by Durand on the subject (which costs around 25 dollars). Now if I could just afford to buy all of the RI obsoletes from Tom Denly and the Balbatons . . . :-)
Confederate States Paper Money, by Arlie R. Slabaugh as always Krause Publications (get used to that name). Costs about 13 dollars.
Early Paper Money of America, by Eric P. Newman Krause, around 50 dollars. Primarily Colonial paper money.
Paper Money of the United States, by Robert Friedberg. Coin and Currency Institute, Inc., P.O. Box 1057, Clifton, NJ 07014.
Comprehensive Catalog of U. S. Paper Money Errors, by Frederick Bart.