OK! We're in business!!
Sounds like you've got a running start on the equiptment you will need to get started- hopefully.
First things first- does your soundcard have a joystick port? Most Soundblaster compatible cards use the joystick port as a MIDI port as well, though you'll have to buy a little adapter cable to give you the MIDI plugs. The first thing you'll want to do is double check to make sure you can get MIDI into and out of that soundcard that way.
If that works, you'll be able to record MIDI with your keyboard. That may or may not come in handy, depending on how you decide to create your music.
You will likely outgrow your microphone pretty quickly, but lets focus on the basics of recording
first and worry about sound quality later. For now, as long as your mic works when it is plugged into the mic input on your soundcard you are in business.
Now then, this is where I am going to run out of gas. I record mostly rock and folk music. I am familiar with the recording process, but I have a feeling that your music is better suited to tools that I don't normally use. I record guitars and some MIDI sounds, but I think you may have an easier time working with loops. (Loops are cool, pre-recorded sounds that you just arrange like building blocks- its REALLY easy.)
Have you looked at Acid software? Here's a link to their entry level software:
http://www.sonicfoundry.com/Products/NewShowProduct.asp?PID=511
And I think this one is free! :
http://www.sonicfoundry.com/products/NewShowProduct.asp?PID=268
And that leads me to warning number 1: don't spend much money on software until you know what you are spending your money on. Try demos, play with as much as you can, learn what software is good for what. Spending money on the wrong program is very frustrating, so its best to spend the time to get to know what you need.
My guess is that the folks in the rap/hip-hop/dj forum will have MUCH better advice for you on how to go about recording your ideas.
Your computer is more than capable of recording. If you end up recording much audio (either with your mic or by plugging your keyboards audio output into the soundcard) you'll run out of harddrive space pretty quickly. Using loops and MIDI will avoid that problem. I'm a little concerned about that 61% resources free- that computer is pretty loaded with background stuff. Did you get that figure with email and web programs running?
Anyway- to answer you question: yes, you can do this. It will take some patience and time, but it really isn't horribly hard. New, yes, but not hard.
Take care,
Chris