Hello all,
Well, it took me about 3 years to put together my home studio, I asked the same questions on different forums and news groups and got really good responses, based on those responses and a lot of research, this is the setup that I now have:
PC: PIII, 850Mhz, 512MB RAM, two hard drives (one for audio only and the other for applications), Plextor CD burner, Windows 98SE.
Audio/Midi interface: ECHO Gina for audio and Midiman 4x4 USB for MIDI.
Software: Cakewalk Proaudio 9.0 for midi and digital audio sequencing. Cubase is pretty good too. I use SoundForge 5.0 and Cool Edit Pro for mastering.
Synths: Roland XP60 and PSR640, I orderd 9000pro two days ago, looking forward to get it sometime next week. I use Roland MDB-01 for bass and some drum sounds (very realistic bass sounds!)
Mixer: This is probably the most important piece of equipment in your setup, I think. I currently have Yamaha O1V digital mixer, this is probably the best investment I have made. Excellent piece of gear with 16 channels expandable to 24. Awesome effects, decent compressors and pre-amps. You could go the analog route but you will end up paying more for a decent mixer and effects combined. If you do decide to go analog, I would suggest Mackie. You could also use your computer for mixing but I like out board mixers.
MIC: As everyone suggested go for AKG3000, it is an awesome overall mic. Another good one is Rode NT1, which is probably cheaper than AKG.
Mixdown: I currently use Tascam CDRW700 cd recorder for mixdowns, you could use your computer to do that, but again, I like doing it this way since I can mix on to a CDRW and listen to it a few times to decide whether I want to keep the mix or mix it again. For a while I was using different minidisc decks, they were pretty good, but there was definitely some loss in sound quality.
Monitors:
I use Alesis Montor 2. There are a bunch of good ones. If your budget permits, go for Mackie monitors.
I am in the process of sound proofing my home studio. The thing I like about my setup is that once all the instruments are connected to the mixer it is all digital and there is practically no loss in the sound quality. Hope it helps.