I'm posting the following because several people have asked about my recording equipment:
Microphone: Shure SM57
Recording Software: CubaseSL
Audio Card: Creative Labs Audigy Platinum2
Digital/Analog Converter: M-Audio FireWire Solo
Frankly, I don't really care for the quality of my audio clips. They sound too raspy to me, especially by the time they become mp3's.
As should be obvious from the list above, I use my computer to do the actual recording. The microphone plugs into the left channel of D/A converter and a second computer's audio output plugs into the right channel --the second computer plays the play-a-long track. The D/A converter's output then plugs into the SPDIF input on the audio card. Cubase does the actual recording, which I rip into an mp3 with Audiograbber. What a mess!
There are plenty of other applications you can use to record, many of which are cheap or free. Audacity, for example, is free, runs on a variety of operating systems, and is open source.