Choose a computer brand you are comfortable with that has good track record. The center of your studio should be the computer. Track recorders, reel-to-reels, and hard disk recorders are now obsolete. Clock speed is the most important; 2.5 Mhz on the low end, 3 Mhz on the high. Having multiple cores, which takes the strain off your CPU, are preferred. The larger the hard drive the better: 1 terabyte is recommended.
Purchase composition software with an onboard sequencer. Propellerheads puts out composition software called Reason 4.0 that works as a powerful sequencer with thousands of sound banks. It has unlimited MIDI tracks and is usable with almost any control surface. Additionally, there are other solid products like Cubase, and Cakewalk.
Purchase multitrack production software. Reason 4.0 works seamlessly with a Propellerheads software program called Record, which records voice, guitar, drums, and other analog signals. This software allows you to master simultaneously sequenced tracks and analog tracks. It exports as WAV or AIFF files, which later can be converted into MP3 or WMA files. Software like Cubase and Cakewalk can import WAV files exported by composition/sequencer programs and can be used with a variety of sequencing/composition software brands as well. The user interfaces on these programs are similar and all require consistent use to master.
Connect an audio interface. You will need an audio interface to record analog signals. Most interfaces come with MIDI interfaces in them as well, so separate units are not necessary. You can get as small as a 2-by-2 breakout boxes and as large as an 8-by-8 (eight inputs, eight outputs) for under $500. Presonus makes good units. Interfaces attach to your computer via USB or Firewire. Neither is faster than the other--it's all about what is available on your computer.
Install all software and audio interface drivers. Place the CD's into the drive. Most software self-extracts and installs--just follow the prompts. Restart your computer after each install.
Install powered reference monitors for playback. Headphones are good, but they're only part of the way you record. Alesis makes a small, but powerful line of speakers, but many companies have good products. Speakers should be no smaller than 6 inches to 8 inches.
Choose your mics wisely. These are the first piece of electronics to touch your input signal. A bad mic can destroy a track. Condenser mics are the most responsive for voice. Bluebird makes affordable mics (under $500) that perform like mics that cost twice that.