Man, you leave for three months and things totally change!  The site looks cool and it looks like traffic has really increased here.
I think that people are making good points, and each one is correct and valid to people based on their needs.  The original poster didn't give a lot of info about how serious he is and how big of a setup he is looking for eventually.
I have a friend who records mostly one instrument/vox at a time and he is looking to just put stuff onto a medium he can listen to and he wanted something more than a 4 or 8 track.  So he got a fairly old computer for $200, I think a little over 1 ghz, and 512 RAM, a little Behringer 4 channel 
mix box, a cheap condenser mic and a Sure SM58, Cakewalk 9 for $40, and his soundcard is nothing special.  He put this together over a few months for less than $500.  He is totally happy.
When I got into it, I wanted to be able to produce my own demo's out of my home and not keep giving it to local studios while under the pressure of the clock.  I put close to $10K into my home studio.  Then I had to spend over a year and a half of reading, recording, reading, recording, asking questions, recording, experimenting, recording.  Finally now I am getting results that are equivilent (or very close to) to what I used to be paying for. 
So I think that is where everyone's suggestions are good ones.  Are you just a singer/songwriter looking to get ideas down recording one track at a time?  Are you not concerned about trying to sell your recordings but just looking to do it so you can make a little CD of your tunes? Then you probably don't need top of the line software and computers to do it.   Want it to sound decent?  Get a decent soundcard.  Want it to sound even better? Then invest a good mic or two and learn how to use them.  Are you going to be using a lot of soft synths?  Well, then your going to need more computer oomph.  Going to put out the next great trance/dance album with soft synths...then you REALLY need more computer oomph, these will eat up your CPU very quick.  Just using a mic, a guitar, a bass, and a hardware keyboard?  Don't need as much.  You want to layer 32 tracks of digital audio?  Then you need a better computer.  So the point is, the computer needed depends on the projects the person is looking to do.
With mics and gear I always suggest get the best  you can afford, and don't make the mistake of upgrading stuff one level at a time.  ie..if your going to get a mic, don't get something cheap, then realize you want something better and get the next step up, and repeat that over and over.  I see friends waste a lot of money always buying something slightly better and then in a month wish they had saved for an even better piece of gear than the "upgraded" gear they just put out cash for.