I don't think your budget will allow you to buy an interface and microphones that will be very worthwhile. One better alternative is to buy a handheld [[url=http://[/URL]="http://www.sweetwat…"]flash recorder[/]="http://www.sweetwat…"]flash recorder[/]. You can get a good sound from these - certainly good enough for a HS audition portfolio. You will learn a lot about recording as you experiment with positioning of the recorder. (Be sure to invest in whatever mount and camera tripod is necessary to allow you to position the unit.) You can transfer the recording to your computer and edit it and burn it to a CD. In addition, the recorder is a good tool for recording practices, lessons, and concerts where you don't need a pro quality recording.

Going a little further with Bob's suggestion, you can also download Reaper software for free since you probably have no budget left after buying the handheld. With Reaper you'll be able to edit the sound with either the supplied plugins or the millions of freeware and shareware plugins that are available. A good place to start for plugins would be a place like [[url=http://[/URL]="link removed Virtual Instruments, Virtual Effects, VST Plugins, Audio Units (AU) & RTAS Audio Plugin News, Reviews and Community - plus iOS (iPhone and iPad) and Android Audio App News Too[/]="link removed Virtual Instruments, Virtual Effects, VST Plugins, Audio Units (AU) & RTAS Audio Plugin News, Reviews and Community - plus iOS (iPhone and iPad) and Android Audio App News Too[/].

Thanks for the suggestions guys, I'll keep these in mind when I make my final decision (currently asking some people who know more about recording than I do).
I just have a couple of final questions before making that final decision:
1. If I decide to opt for condenser mics instead of a handheld mic, would there be any difference in using 2 Cardioid condensers versus 1 Omni condenser in terms of sound quality and ease of use?
2. No matter what kind of mic I decide to get (handheld/condensers), would I need to invest in shock mounts (my flooring is rather prone to vibrations), or would a simple stand->boom->mount work?

Thanks again guys, I'm almost ready to make my decision!

Micing an upright is not really that straightforward. Depends on the room and the piano. There are lots of suggestions in the archives. Unless your room is especially good sounding I'd guess that the cardioids would be the better choice. (But that's all things being equal. Two bad cardioids would NOT be better than one good omni.)

If you have a friend who is into recording see if you can borrow equipment.

With your budget I'd skip the shock mounts until you find you can't live without them. You can try some DIY methods to isolate the stands and just keep the vibrations away from the floor.

I will be miking in my living room.
Living room is rectangular shape, about 12x20 (top/bottom walls are 12', right/left are 20'). Hallways to main entrance and rest of house are on the front/rear walls facing each other, adjacent to the left wall. There's also a fireplace in the middle of the right wall. Finally, there's 3 windows: 2 on the right wall (near the front/rear walls) and one on the front wall, close to the right wall.
I'll probably be placing the piano parallel to the longer walls, facing and closer to the left wall, and testing out various mic configurations.

The cardioids/omnis I'm unsure about and comparing are AT2020/AT2021 (cardioid, both are pretty similar) and an AT2050 (Multi-pattern: cardioid, omni, figure 8). The 2050 is $150 after rebates (orig $200), but it comes with a shock mount while the 2020/2021 come with DAW software I mentioned in the OP and are $120 after rebates (orig $150).

I agree with BobRogers Your idea are cool but your budget won't allow you to go for this venture.

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