An audio interface is essential for connecting microphones, MIDI devices, and more to your computer. These typically connect to your computer through USB 2.0 or Firewire. Audio interfaces also allow for low latency when connecting analog equipment to your computer. Latency determines how much lag there is between the signal you send and the sound you receive. It is important to make sure your latency is as low as possible. Decide what equipment (microphones, synthesizers, etc.) you plan to use before buying an audio interface. If you are planning to use a condenser microphone, be sure to buy an audio interface with phantom power, or the microphone will not work (most entry-level audio interfaces do not come with phantom power).
If you want to record or manipulate audio, you must have a Digital Audio Workstation (DAW). A Digital Audio Workstation allows you to record the signal from your audio interface to your computer, and can edit MIDI notes. Before purchasing a Digital Audio Workstation, research DAWs to find the software best to your needs. Ableton Live 8 is an excellent Digital Audio Workstation, but is suited more for electronic artists. Pro-Tools is another excellent DAW, but it has poor MIDI capabilities, and is therefore suited more to rock musicians. Decide what kind of music you will be making and research what each Digital Audio Workstation has to offer.
In order to create music, you will need to either record an instrument through a microphone or record sound from a synthesizer. The most common type of microphone is the condenser microphone. These microphones have a high frequency response, and are thus the microphone of choice for music producers. They are generally more expensive than other types of microphones because of the complex internal mechanisms. Synthesizers are also instruments; however, they can plug straight into your audio interface. They are capable of producing a wide variety of sounds, and often come with a keyboard attached. Synthesizers are used primarily in electronic music.