hey!
don't know if this thread is still active but thought i'd throw in my two pennies for how to record at home..
im a 2nd year Music Student at university doing tech and composition.
first off sort out an interface, i currently have the Roland Quad Capture which has an auto-sense function making setting levels rather easy. it isn't firewire but then it doesn't really have to be as it won't lag on two channels.
i use Logic Pro 9 at the moment. fair enough it cost my 170 quid but it was money well spent, although it can be a little daunting it is really easy to use but not that user friendly to 'newbies' to the recording game.
i then have a choice of microphones, an sm58 for general recording ideas, a Rode NT1-A which is really nice at capturing mid to high frequencies but doesn't bottom out that well. i finally have a SE2200 which i use for vocals as it has a brilliant overall range of frequency response.
I have a MIDI controller Keyboard which is just a simple Korg Micro-Key, this does my just right for recording simple patch based ideas.
for monitors i use the M-Audio BX5 D2's which need TRS cables to balance them. these work brilliantly and, whilst they aren't the glamourous KRK's, are still a good basic monitoring active pair at around 140 pound.
there may be a little 'cavalier' attitude by some as to how this and that should be done when recording say an acoustic guitar but the only way you will know for sure is by practicing microphone placement. it isn't as simple as just throwing a microphone in front of the sound source and expecting it to pick up all the right frequencies that you want to make it sound a particular way. there are countless things to consider when recordings. do you want the recording to sound intimate? i.e. like someone playing in a bedroom? you will want a close mic effect and lots of absorbent material in the room thats being used as the live room etc. if you are recording an amplified guitar then you will need to understand room Nodes and the ways that sound waves propagate through a space at certain frequencies to find the best place for one of the microphones etc.
all in all there are many ways to record a vocal, guitar, bass, drums, piano etc but the only way to find the best way is through experimentation. every 'rule' that is thrown out there by people can instantly be broken by an example that completely contradicts the rule…so just experiment… and have good gear
I hope this helps