NRA instructor training consists first of the Basic Instructor Training course (BIT). After this, you then sign up for the disciplines you want to instruct (pistol, rifle, shotgun, muzzleloading, etc).
To take the NRA Pistol Instructor course, you either have to complete NRA Basic Pistol as a student, or demonstrate that you can safely handle a pistol (same for the other disciplines). You will be required to show different action types (semi-auto, revolver, etc.), proper loading and unloading, and that you always keep the pistol pointed in a safe direction.
The live fire session will be a demonstration of your ability to follow the rules of safety and proper handling, as well as your ability to teach them to someone else. As southpaw said, it is NOT a master marksmanship course.
For specific questions about a particular course, contact the training counselor who will be teaching it(we were required to bring notebooks, a binder, and a "training aid"). I have not heard of any instructor course that required the student to provide a firearm and/or ammunition, but it was optional.