Sound card. Sound blasters don't really cut it.
Look into M-Audio stuff, or Echo stuff.
If you will record with microphone, you'll need a microphone, and a preamp.
Studio projects has some good mics for cheap. SP B1 Large diaphram condensor is about 80 bucks, good for vocals or instruments. Marshal MXL 603s are good Small Diaphram condensors for doing stereo recordings of instruments. Or you could get a Shure sm58/57 for a dynamic mic, they're kind of all around mics, can be used for live stuff as well.
Preamps. Studio Projects VTB-1 for about 129, M-Audio DMP3 for about 199, FMR RNP for about 475.
You could get a compressor if you're doing a lot of recording with microphones. As far as i'm concerned in the budget area there is nothing that can touch the FMR RNC, and i think most everyone will agree with that.
And most importantly you need some monitoring speakers. I'd say the Yorkville YSM1p or the Tannoy reveal Actives are a good starting point. M-audio also makes some decent ones.
You have a keyboard/midi controller already. Softwear. Maybe some plugins, or free plugins for effects. But your softwear probably comes with some. Cables, mic stands... Maybe accoustic treatment for your room?
It's really endless...