For decent and basic home recording I think this is waht you need:
PC: Interl Core @ Duo with 2 GB RAM (minimum) and at least 250 GB HDD
USB Audio Interface: there are cheap but good choices like M-audio Fast Track or a Line6 UX1. Whats good about these interfaces is that they come bundled with recording software (Ableton Live) and Guitar Effects.
MIC: I think the Shure SM58 (a legend!) is under $200 just check it out.
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