* 2 cups fresh basil leaves, packed
* 1/2 cup freshly grated Parmesan-Reggiano or Romano cheese
* 1/2 cup extra virgin olive oil
* 1/3 cup pine nuts or walnuts
* 3 medium sized garlic cloves, minced
* Salt and freshly ground black pepper to taste
* Special equipment needed: A food processor (Check Amazon.com's sales on Cuisinart food processors)
1 Combine the basil in with the pine nuts, pulse a few times in a food processor. (If you are using walnuts instead of pine nuts and they are not already chopped, pulse them a few times first, before adding the basil.) Add the garlic, pulse a few times more.
2 Slowly add the olive oil in a constant stream while the food processor is on. Stop to scrape down the sides of the food processor with a rubber spatula. Add the grated cheese and pulse again until blended. Add a pinch of salt and freshly ground black pepper to taste.
People will hurf and blurf forever about the "correct" way to make pesto but in all honesty that's like saying there's a "correct" way to make salsa or marinara. Basil is the key, defining ingredient but everything else is supportive and thus can be substituted for similar things based on taste, availability, and cost.
The pine nuts are probably the most commonly substituted ingredient simply because pine nuts are freakin' expensive. Cashews cost half as much and have similar flavor. Walnuts are even cheaper. If you're really strapped you could even substitute peanuts, which cost about 1/6 what pine nuts do. The key part being provided here is a nutty flavor and a little toothiness in the mouthfeel. Most any nut will do.
The oil can also be done to taste or budget. The olive flavor from extra virgin olive oil may be indispensable to some, others may prefer light olive oil for a milder flavor. The oil here is providing fat to bind everything together, keep it fresh, and add fat to round out the flavor and make it a sauce instead of a salad.
The parmesan is in a gray area. It is second only to the basil in the amount of the flavor profile that it contributes to, so some will find it indispensable (I am one of them). However, any finely grated hard cheese will serve the purpose of thickening the oil and binding it to the other dry ingredients. Some softer ones might even work, I haven't tried. One thing, though: in the classic recipe, the parmesan provides most or all of the salt going into the sauce. If you substitute it you'll probably have to add some salt to taste. If you drop the cheese entirely you'll definitely need to add some salt or it will taste bland.
The garlic can be raw or cooked. Browning the garlic slowly in some oil will get rid of the astringent properties of raw garlic, but will also mellow out the flavor. And hey, if you don't like it, leave it out. If you can't afford or have no access to actual garlic, find a substitution chart and sub in an appropriate amount of garlic powder.
Pesto was most likely invented as a way to make a cheap, tasty sauce when one had extra basil, using ingredients that were readily available and cheap to be had. Sticking religiously to the classic recipe is not only expensive but contradictory to the original nature of pesto. If you don't mind using a cheaper nut, oil, or cheese, for god's sake don't waste your money. If you prefer a different flavor, same deal. It's just a sauce, it isn't like you're baking a soufflé that'll fall flat if you do one thing wrong.