Let the Games Begin...

For as long as I can remember my mom would tell me stories about her life pre-Shannon. I, just like any little girl, loved these stories and stored them in my file cabinet like brain. One of the things that she always told me that her biggest fear of raising a child is potty training. I always played that off as first child syndrome, but now I know that is a very founded fear, one that I should have had from the get-go.
We are at an impasse in our house. Caleb is SOOOOOOOOOOO excited about having a potty and even knows to strip out of the bottom half of his clothes to sit on it. However, he doesn't do anything but sit on the potty and smile at me with a smile that says he knows he's up to something but there is no way he's sharing. Another issue is that Caleb does not want to wear diapers anymore. He's not peeing or pooping in the potty so he can't go into underwear and there is NO WAY I'm spending all that money for him to potty in pull ups until we get the concept of doing it in the potty too. What do I do now??? So much for being excited...