1. That's a bit weak for a DAW, 512meg of RAM is really the minimum, particularly if you're going to be using software synths and stuff. Memory isn't too pricey these days, if you could stretch to a gig of RAM (and your MOBO has the slots) that'd be ideal. The P4 CPU should be up to the job though. Soundblasters aren't very highly regarded for recording but if you're looking at buying a 'proper' card or interface you'll be able to ditch it.
2. Yeah a soundcard and an interface are slightly different but they do the same job. Interfaces usually refer to external boxes which you plug your sources into and connect to the comp via firewire or USB 2.0 (USB 1.0 really isn't up to recording). Often these have other features like mic preamps and even control surfaces (like a mixer that integrates with the software). A soundcard is usually a PCI card which you install inside your comp, sometimes these have a breakout box though so are kind of like a soundcard and interface combined.
3. yep sounds like one at at a time would be fine for you but most interfaces have a minimum of two ins anyway. Good news because more ins means more $$$$$$$$. You can get a pretty decent 2 in card for not much money at all. Check out the M Audio audiophile 2496 for a dirt cheap 2 in 2 out PCI card with MIDI in out too.
4. yeah exactly, or a drumkit or something
5. Yes you could do that. If you have a multi input card and a mixer with direct outs on each channel then you could get seperate tracks recorded into the comp. But as you say if you've only got a 2 in card then you'd have a stereo mix of whatever goes through the board. In the absence of direct outs you can use track inserts as outputs by clicking a 1/4" TRS jack lead just half way in. A cool little trick as most cheaper mixers don't have direct outs but most have inserts. You could use the mixer for mic preamps anyway, they won't be anything special but they'll get you started.
6. Try a search here, I recall there have been a few threads like this and quite a few reccomendations made on books. Here's one such thread from a titles only search for 'books':
https://homerecording.com/bbs/showthread.php?t=203825&highlight=Books
On that note get used to the search facility, there's loads of great info on this site.
7. I've recieved a lot of help here myself so it's nice to be able to help others in return.
