How do you set up a home recording studio?

How do you set up a home recording studio?
well there's several ways to go about doing this, and of course money is gonna be required, the more u can pay, the better the equipment USUALLY is.
First off you can do it Analog or Digital, Digital is more common these days and easier to work with i think. If you want to use a computer you can download a multitrack recording and editing program such as Cool Edit Pro or whatever else you can find. You can download demos of different programs and find one that you like best off of Kazaa or Limewire.
Depending on what kind of computer you got or soundcard, you may want to invest in a new soundcard like a Delta 1010LT off of musiciansfriend.com or you could buy an external device like a Firewire input. From here if you only want to use one mic, you can just go right through there. But if you want to mic several instruments or whatever, and adjust their volumes, then i'd get a mixer. They come with different numbers of channels depending on how much you want to spend or how many mics your going to use simultaneously.
The setup I use works pretty good, I have the Delta 1010LT installed in the back of my computer and I have a Peavey PV-14 mixer connected to it. I use cool edit pro for my recording program.
As far as microphones go, you needa know the difference between condenser microphones and Dynamic microphones. Dynamic microphones are usually cheaper, simpler and easier. But they may not sound as good for you. They use a diaphragm that requires no power to pick up the audio signal. Condenser microphones require phantom power, if you are gonna buy a mixer and use condenser microphones with it, make sure the mixer can produce the phantom power required by the microphone. Condenser microphones also have a front, unlike the dynamics, and pick up the audio best on that part. Make sure u get mics that can pick up the highs or lows of the instrument they'll be used on. As far as micing positions go....there are infinite ways to do them. Experiment till ya get what ya like, most people don't put them right in front of the speaker but off to the side a little bit.
Yea theres a lot more stuff to cover, but should be a sufficient summary to help ya get started.