Yes, it scales with level, but I think you can't get X weapons and armour at all on the first playthrough because your level is capped at 50, and I think you need to be more like 55 or so for the X stuff to start appearing. I think you might start seeing IX stuff now and then by the time you're at level 50, so expect to go into the second play with mostly VIII and IX stuff.
I shouldn't worry too much about saving money. I made the Rich achievement (1 million credits) without even really trying in the first playthrough, and in the second I soon found I was making credits faster than I could spend them, hit the games max and ended up giving away quite highly ranked weapons and armours or turning them into omni-gel. Making enough money to buy anything I wanted seemed easy in ME1. I'd suggest going gradual and not trying to outfit the whole squad with the best stuff you can find, much of which you don't need to buy because you find it in boxes or it's dropped by dead enemies for free, and instead do it a squad member at a time as and when you need their particular set of talents for a mission. And of course go back to the various shops and sell un-needed stuff to them regularly.