I sing and play rhythm guitar, mostly Country, some bluegrass/folk, and I also really enjoy the old Rock n Roll like Janis Joplin, Pat Benetar. I use karaoke

sometimes. (I'm ducking and running!

)
My needs are pretty simple, I think. I want to be able to record and manipulate vocals, guitar, keys, "canned percussion", and bass guitar. I'd like to have two to four tracks for vocals so I can harmonize with myownself, and enough tracks left over to cover any other instrumental parts I may need.
I have a shure 48 mic, a pretty cheap amp that I bought with my cheap electric guitar, and a nylon string acoustic. I do not know how to input the different musical parts into the computer, I'm assuming I need something like a pre-amp, but is there an even cheaper solution? I'm not looking for professional quality, just the cheapest way possible to mix these parts, and hopefully manipulate them somewhat with some decent software. I am willing to give up more time than cash.
Which leads me to one more thing I need, some software that's hopefully user friendly. I have no idea what to buy, and I don't want to pay for something that will end up a waste of money.
My local music store is selling some kind of interface with appropriate software for $200 and I'm probably going to purchase this, but am I going to regret it in the future, and wish I'd spent that money elsewhere? Or does this sound like a good starting point? Would this little "kit" be all I need? Or should I quit trying to go digital? I just can't afford to sink thousands of dollars into this, but I'd like to be able to record a few decent sounding recordings.
All I really need is a way to create a couple of demos that I can put on my website, myspace, etc, and record some amateur CD's for my own amusement. My hope is that I will meet other musicians and maybe become involved with a band that already has a bunch of equipment so I don't have to purchase it all myself. I have no desire to create a recording studio. After meeting some like minded people, I can spend my money on the equipment I would need to fulfill the band's requirements.
Oh yeah, about the spending amount... well, it's hard to say how much I can spend, I want to buy the most appropriate, least expensive possible. $1,000 is very high for me, $100 is probably not going to be enough. Maybe that helps?