An isolation transformer is useful if you are working with live mains voltage stuff. If you use wall warts, batteries, bench power supplies, or enclosed power supply modules you don't really need it. You probably don't need or want a step down transformer, just a standard 1:1 isolation transformer. Generally I wouldn't expect you to need a huge transformer, just enough to power your device under test and maybe an oscilloscope.
The biggest difference with medical grade isolation transformers is that the leakage current limits are much smaller, and the insulation rating is much higher. Capacitance between the primary and secondary windings, or secondary to ground allows some leakage current to flow. Also, surges on the primary can be coupled to the secondary through capacitance or insulation breakdown. Normal isolation transformers are intended to be safe in the case of incidental contact. If you are powering an EEG probe that is attached with conductive gel to someones chest you need to be a bit more careful.
An isolation transformer does not protect against everything, and can easily be rendered useless. Of course the standard problem is that if you touch both live and neutral lines at once, you complete the circuit in spite of the isolation transformer and still get shocked. More subtly, if you connect a device under test to a grounded instrument, you provide a connection between the primary and secondary, and you are essentially no better off than before. This can be a computer via a USB interface, an oscilloscope, an audio jack, or simply because the device is in a metal case resting on a metal bench. You can start connecting everything in your lab to the isolation transformer, but now there are so many more ways you can be connected to the local 'isolated' ground that you increase the risk of the first problem. Isolation transformers are great for measuring a single device that doesn't need to be connected to anything else to operate properly, but those are becoming less and less common.
A much cheaper option that provides many of the same benefits is a GFI. This doesn't isolate the voltage, but instead senses a leakage current and shuts off the power. The nice thing about GFIs are that if you provide a leakage path to ground, it shuts off immediately rather than silently degrading to a non-safe, non-isolated condition.
What you need in the end also depends on whether you are working with line powered low voltage electronics, non-isolated line voltage power, or true high voltage electronics. Without more information, it is hard to judge, but I suspect that a 5 kVA medical grade isolation transformer is not what you need or want.