As a few others have stated, a good microphone is the most important part of your recording studio. There are some "decent" mics to be had for less money, but for top quality vocals, you can't beat a Heil PR40. If you can afford it, the difference between this and less expensive mics is amazing.
Heil PR40 at Musicians Friend (you may find it cheaper elsewhere):
http://pro-audio.musiciansfriend.com...ELAID=26020819
For simple needs, an M-Audio USB interface will do just fine. I have an older version of this one:
http://pro-audio.musiciansfriend.com...ku=703669#used
If you want professional results, then definitely get the shockmount for the mic, as well as a pop screen. You should also Google inexpensive methods of soundproofing your recording room. Some people do it all in a closet that is soundproofed. Most computers have fans that make noise, so put the computer outside the recording area if possible.
Regardless of which software you use to record your vocals, you should record to PCM (WAV) files. This is a lossless format. You can save to MP3 (lossy format) later if you wish. Always do all editing, mixing and processing with the PCM files. Using MP3 files for editing and such only gives you lousy results.
Edit as you see fit, but use the minimal amount of processing (compression, EQ and such) needed. Too much processing will sound bad.
Experiment with things before you have to make real product and see what sounds best. If you know anyone with experience in voice recording, see what they think.
Joe