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Simple recording on a budget

As of now, I am using a cheap little desktop mic that came with my computer to do my acoustic recording. I'm interested in stepping up to some decent recording equipment but going the cheapest way possible... a "bang for the buck" sort of thing. I'm not sure whether I want to look into a Digital 8 track recorder, or just recording hardware to hook up to the computer.

Final Soundcard Decision -- $1000 budget -- Specific Artist

specs:
Windows XP SP2
AMD 3500
1.2GB RAM (might double soon -- although past 2GB, I've read, on computer engineer forums, is generally pointless and will actually slow a system)
Soundblaster Audigy32 (old)
Priority of programs used (in following order): Fruity Loops 5 / Wavelab 5 / Reason / Cakewalk