I'm using a Soundblaster Live! Value only because that's what came in the PC I just bought. I don't know anything about the software you're using - I use N-track.
Your questions really have a lot of open ends that will affect the answers you get. For example, are you recording for yourself or to produce and market CDs? What kind of mic(s) do you have now? What kind of guitar (acoustic or electric)? Do you plug your guitar directly into the soundcard or do you have an effects unit, direct box, etc? What kind of music do you play?
I'm fairly new to home recording (on a 4-track for about a year and on a PC for only about 6 weeks) but I'll take a stab at your questions. For starters, don't use the mic input for anything - use the line in.
You could go with a mixer or a preamp, depending on what you want to do. If you're micing a drum kit or several musicians at once then you'll probably need all the channels you'll get from a mixer. It should have preamps on the inputs, as well as phantom power if you're using condenser mics, but the tradeoff is that the preamps may not be as good as separate preamps (depends in part on your budget). I only record one track at a time so preamps made more sense for me - I bought
an ART Tube MP and
an ART Dual MP. They're at the low end but they do a good enough job for my needs. I run all my mics through them, even the dynamics that I don't use much anymore, and these units also provide phantom power for my condenser mics.
I also use the preamps in other ways just to get some extra mileage out of them. For example, I *just* started playing bass (I've been playing guitar for about 18 years though) and use the Tube MP as a direct box. It's not as good as a decent amp simulator, which I'd like to eventually buy, but it doesn't sound too bad for now. I also run my drum machine through the Dual MP sometimes. It doesn't make a *dramatic* difference, but it usually makes it sound a little warmer.
Once I put down usable tracks, I experiment with various plugins for effects (compression, chorus, reverb, EQ, etc). The only outboard processer I'll probably buy in the forseeable future is a compressor - it's probably a necessity for recording digitally. I could probably get away with doing everything else in software.
If your budget is higher than mine or your needs are more demanding then you'll probably want/need a more extensive suite of equipment to work with. You would also probably do better with higher end units then I have now or plan to buy. Like I said earlier, a lot depends on what you have now, what your needs are now, and what your needs will be in the future.
Welcome to the money pit!
