I do everything in the box. I have a Dell dual xeon 3.2 GHz processor w/ 4 GB of RAM computer. I use Cubase SX 2/3 and various VST's.
I have a novation Bass station keyboard and a Roland V-Synth keyboard and a Fender Stratocaster guitar that I don't know how to play but I can cut and paste that which I can do to come up with the guitar pieces that I have recorded alog with the brass slide and a lot of echo.
My microphone is a cascade M20 that I got for free whith my Delta 1010 soundcard. I use Behringer Truth B2031 monitors and an Alesis 3630 compressor. There are so many things I would like to have to improve my sound but alas, it is not so at this time.
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Great home recording starts with a great home recording studio. It doesn't need to be expensive if you know how to select the right equipment for your needs.