I like that sentiment, have fun, and it really helps to have a simple, straight forward set up. I like a good laptop because its portable, throw it in the car and go to your freinds house. For software follow the KIS principle.
Get a headphone amp mixer so you and the band can jam together through the cans and record.
You can throw down rough demos with drums using one mic in front of the snare about one foot back and slightly higher, it will pick everything, crap quality but enough to see if the song is turning out good, if it is, re-record the drums with more mics, a cheap 8 track mixer will do the job. Or talk your drummer into getting an electronic kit, these are less than a grand now and you can smash away at 3 in the morning without the police coming around.
For guitars the direct injection technology is so good it's a great alternative to a real amp. That said, an amp and mike in the bathroom makes a great isolation booth and the hard surfaces give a lovey recorded tone.
After you have recorded your song, slap down a rough mix, turn the sound right down until you can hardly hear the music, can you still hear every intrument? If not adjust at this volume and then crank it up. Listen to the song on lots of different systems, often the mix sounds completely different on an iPod as compared to a stereo. Listen to it for a week or two, you will start to hear things you didn't when you first mixed it, usually that the guitar is not loud enough
Here is an original song I did in an afternoon using Cakewalk
Post your tracks but wince as the internet compression makes mush of the highhats