Stop scoffing purists!!
I've been operating an incredibly simple (and cheap) setup for a reasonable amount of time. My initial priorities were getting some tunes laid down with various tracks (a number of guitars, vocals, bass, drums). Not at all for distributing as the sound quality isn't exactly perfect but to pass to band mates and bounce ideas of each other.

Anyway all I needed was:
Laptop
Audacity
Input jack (convert guitar lead to laptop sound input)
Modelling Amp
Musical Instruments

So I basically plugged the amp straight into the laptop and started recording away and you can actually get away with quite a lot.

The only problems were:
a) Vocals sounded a bit shit as I was recording in my bedroom with a cheap mike.
b) Most of my equipment is cheap shit (guitar/bass/amp etc)
c) Took a fair amount of experimenting to get the input to audacity settings correct and passable.

But all in all for mucho cheapness you can lay your ideas down and that alone is invaluable..
( whenanimalsattackhumans clad in global hypercolour, Thu 13 Nov 2008, 12:30, Reply)