This has turned into songwriting/recording thread which is appropriate for home recording, since most of us are demoing all of our original creations at home. If you're new to home recording or songwriting, you may want to read this.
I find it helpful to switch from piano to guitar during the writing process. It gives you a different take on things. Also, try putting on the capo, or switching between your acoustic and electric. Try alternate tunings. Try electric piano sounds. All the changes will inspire different parts and ideas. Jamming to a drum loop is also a great way to woodshed.
For lyrics, I use a word document or piece of paper and brainstorm words related to my idea, then use the rhyming dictionary and thesaurus to put as many words at my disposal. Then I write the verses, and take inspiration from the plethora of ideas written there. Lots of rewrites later, I'm ready to record.
Recording always starts with a reference track, usually piano, since that's my main instrument. At this point, I'll need to solidify the basic structure of the song. From there, I'll add instruments at random, but usually bass and drums first. A reference vocal goes down very early.
I'll then plug in my guitar or keyboard, and jam along to create hook lines, riffs, fills, and lead licks. This part will take hours, or even days. I try different sounds in my keyboard and different guitars and settings on the amp. Lots of experimentation goes on. Rhythm parts are locked in first, then lead parts.
Once I have a decent bed of tracks, I do the keeper vocal part, trying different microphone placement to get the right sound for the song, and for how loud I'm belting out the tune. I'll do a few warm up takes to get the sound the best it can be with mike placement and optimize the levels, then do around four (hopefully) good tracks of the lead vocal. I'll then composite the best of those tracks into the keeper track. Most singers have their best takes from the fourth to the eighth take. They're still warming up on the first few, then later on they start to get burnt out after singing the song so many times. Harmonies are definitely close to the last thing to go to hard disk.
Then I prepare each track by removing background noises, and normalizing. Sometimes I'll put the track through a limiter to remove unwanted transients. This is where I'll eq each track to give it its own space in the frequency spectrum. I'll usually create a little bump in a frequency range of each instrument that will help bring out its personality. This is done very sparingly as any drastic eq'ing wrecks the sound. I'll also put a high pass filter on each and every track. On bassy instruments, I'll just get rid of the subsonics, but on everything else, I rip the bottom right out of it. I'm ruthless on overheads, taking some mids out, as well. This will clean up a mix like nothing else.
Then there's more experimtention with effects and filters. The lead vocal will get a lot of attention, trying different compression, eq'ing and effects. I'll also start doing automation (using Sonar) on the tracks that need it.
This is the point where I'll start using reference songs, professional stuff that has great production, usually something that's in the same genre. I like production on Vince Gill, Dixie Chicks, and Toby Keith since my stuff is more or less country. If you're doing rap, reference with other urban music that you like. I use referencing to determine if I have the right amount of frequency content (enough lows, mids and highs) and overall compression on the mix. I'll also use it to help determine the balance between different instruments. I personally find it especially hard to determine the level for the vocals and bass guitar without a point of reference. I'm not necessarily trying to emulate the production sound of the reference songs, just using them as a guideline.
I use mastering compression, and maybe eq (if the highs are dull or sibilant or if the bass is too rumbly) in Cool Edit Pro, which is a decent mid level audio editing program (it also does multitrack recording, so this may be the only program you need if you don't use a lot of MIDI stuff).
I'm still experimenting with exciter-type programs that create high harmonics and add sizzle and crispiness to recordings, so I won't comment too much other than these programs and devices are used by professionals, but the best ones cost a fortune. If you're trying to achieve this "excited" sound, this is how it's being done.
I'll try to get the level close to one of the reference songs. Then comes sample rate conversion with dithering to 16 bit audio, as I record at 24 bit/44.1 kHz.
Then I'll burn a copy and play it in anything that can play CD's: my car, my DVD player, etc... The TV speaker is especially brutal for exposing flaws in the vocal perfomance. The car stereo is a totally different listening environment, and I find it a great reference. I'll go back and make adjustments based on what I discovered listening on all the different CD players.
Okay, that's my current process. Of course, I may change my mind and do everything differently tomorrow ;-)