Tools you would need:
fontware: Tools needed to edit TFM and VF files.
t1utils: Very handy package for inspecting PostScript Type 1 fonts and doing minor modification on them.
mktexlsr: After installed new fonts you need to run these commands to let your TeXLive distribution recognize them.
otftotfm: Good to have, helps you get to the start point.
A lisp interpreter. So you can make quick hacks to PL and VPL files.
Tools you don't need: FontForge. You won't need this messy thing to be a professional TeXnician, if you would ever use it to edit fonts, just know that you can get better fonts to start with or do it the harder way.
Only quiche eaters use LuaTeX or XeTeX to get new fonts, real TeXnichians write they own kerning tables for the fonts they use.
To start with, we assume you stick with direct PDF output with pdfTeX or DVI output with any of the popular processors. The capability to use certain font formats are different, usually DVIPDFMx is better at handling not so well formed files.
First of all you would need a encoding file, which specifies how
would you assign glyph to at most 256 code points of a TeX font
file. To handle CJK there are special hacks that would not be
covered here. You don't necessarily need to convert the font to
Type 1, but many times you would not able to map some strange
characters from TTF or OTF file, so it would be handy to have a
.pfb file that you could inspect it with
t1disasm and modify the glyph IDs.
After that TFM is what TeX uses to typeset documents. A virtual font produces the same TFM format and in addition a VF file to tell how to find the concrete font.
Then the outline file, usually Type 1, but TTF or OTF would also work.
Finally a map file that associates the outline file, encoding file, and TFM file.