home studio- setup advise

[amt7565]

hello folks!
I am faily new to MIDI. Please answer the following questions. It will greatly benefit me. Thank you!

1. I only use one Guitar to plug into the "line in" of my 'Soundblaster digital value" sound card. Is this soundcard good enough? Or do I need an external sound card?

2. I am using SONAR and DXi softsynths. But I'd love a more realistic sound. Will changing the sound card help? Or do I need to get an external sound module? What is recommended?

3. Is a mixer necessary to use only 1 guitar input and all the rest of the tracks for internal MIDI? If not, is a mixer recommeneded if I am using an external synth module?

4. While performing my final 'mixdown' from MIDI to Audio, the sound degrades. How can I prevent this? Will a better sound card help?
To summarize, I am asking how I can setup a decent homestudio.
Thanks again!