Hi Scorpio,
I found reading Ramshackles post on how to set up a cheap recording studio really informative.
What I now have is a Rode NTC 1a mic £145, Focusrite audio interface £70 from ebay and a cheap Alesis MIDI Keyboard £39.
I started off with Music Creator 6 from Cakewalk £55. So for around £300 I think I have a pretty efficient budget studio.
I already had a few guitars and keyboards. I have already upgraded to Sonar (just because I got used to the Cakewalk layout)
Anyway back to Music Creator - what this allows you to do is to play virtual instruments through the midi keyboard. So once you have your guitar & voice on tracks you can then build in drums, synths, strings, bass - whatever you want and whatever order you want. You can built on little sections at a time , playing little notes and correcting them. The package I got was reduced through a code on Soundcloud - they said it was £200. It comes with guitar, bass, drums and string sounds as well as hundreds of little samples. There is also a great synth called Rapture where you can create and adapt your own sounds - I find this really interesting just now
The more experienced guys on here will be laughing at how basic this all is but trust me this revolutionised the way I create music - I am not a keyboard player but found that you can get quite good if you can have as many takes as you like. If i write a song with chords that are hard to play (for example flat chords on the keyboard) i just transpose it to an easy chord to play and then transpose it back - its astonishing!
So my humble advice is to follow Ramshackles advice and buy Cakewalk Music Creator (or perhaps the people on here have something better) and get working on these ideas yourself - you can do it!