First, get the signal to the computer. Several options here...I've heard some of the MAudio stuff works well.
http://www.musiciansfriend.com/produ...ace?sku=703606
Some people even just
That gets you a USB connection to your computer and you can use Mics or guitars directly into that box.
Then it's software time. Several free choices, actually. There's always Audacity (
http://audacity.sourceforge.net). It's open source, works ok.
Some prefer Kristal. It looks and feels more professional and supports ASIO drivers.
http://www.kreatives.org/kristal/
The ASIO stuff is important. This lets you record and playback at the same time with no delay. Without them, and in Audacity, it's hard to get them to sync up with up to a half second delay. ASIO drivers prevent those issues. (
http://www.asio4all.com/)
Looking through programs on this box, I see I have Reaper installed. (
http://www.reaper.fm/). Haven't used that one much, but it utilizes the ASIO drivers as well. Might be worth a look.