As Richard says - consider you needs carefully, what you and/or your bandmates already own and can put to use (mics, cables, computers), and most of all don't despair! I'll add - read these boards, then read every other board on recording, then re-read them all again. TONS of useful information and wonderful people willing to share their thoughts, experiences, opinions.
If all you are looking to do is make decent sounding demo's you should be able to pull it off. Consider if you'll need to record the complete bands "live" or simply record parts individually.
Individually (meaning perhaps first you lay down the drums, then Bass/Guitar, then vocals, etc.) is probably the easiest method. Cheapest thing to do is pick up a digital all-in-one (Tascam / Korg digital 8+ track or something similar used off ebay). Grab a compressor, some mics, cables, etc. - mic the drums and let 'er rip. Amps can be mic'd individually or recorded direct via line outs or even instrument direct via Pod's, etc.
If you want to do bands complete - playing all at once - you'll need more mics (of course), and definitely a way to help keep sound from leaking between the various mics. And if your recorder doesn't have enough inputs, consider a cheap 12 channel mixer with decent mic pre's (perhaps a Mackie) and pre-mix everything before sending the outs to the recorder.
Or use your existing computer and spend your cash on an audio converter/sound card, inputs, software, etc.
Seems a lot of people confuse wanting to do home recordings with needing to invest $10k+ in order to "do it right". You can record on a $20 tape recorder if you want to. Won't sound good, but it's been done before
Fact is there are probably 50 different ways to do what you're asking, and do it relatively inexpensively. It comes down to your purpose and budget. Budget will limit your results to a point of course, but skill with your equipment can often outweigh someone else's 'Pro' studio gear if they don't know how to use it properly. Heck, the Beatles Sgt. Pepper was done on a freakin 4-track, wasn't it? May not be 'quality' recording by todays digital standards, but it still sounds good to me!
