Still with software – the reason you want something a little bit better than Audacity for recording is VST support. I tell you, if you’re coming from a background of Tascam 4-Tracks, VSTs will blow your mind. Basically, every little electronic thing you might once have wanted – every kind of amp, every kind of stomp box, every kind of EQ, samplers, synths, drum machines, distortion, delay, chorus, reverb, compression, and so on – is now available as a VST plug-in that you can load into Reaper or Acid, or whichever program you choose (except Audacity, which borked its VST support). There are commercial VST effects and instruments you can buy. But you can also do very well indeed for free.
Here is a list of the free VSTs I use and like. It’s a long list:
ADT - Automatic Double Tracking Turns a mono track into a stereo track.
Simulanalog Guitar Suite Amp/pedal simulator stuff for guitar players.
Black Water Reverb Simple reverb effect that sounds good.
Classic Compressor A good, simple compressor.
Voxengo Boogex Another guitar amp simulator, which lets you tune the cabinet and use different simulated microphones. Grab it while it’s free.
LoudMax Loudness maximizer/limiter thing. Squash the crap out of your recording! Join the loudness wars!
LoopAZoid Simple sample player, good for drums.
String Theory Interesting VST instrument.
Dragon II Another interesting VST instrument.
Vocov – This is the one Vocoder plug-in I’ve been able to find that doesn’t crash my recording software and comes with proper documentation.
Cellofan – A cello VST instrument that’s interesting to play around with.
DVS Saxophone – A seriously good saxophone instrument. With careful use, you could almost mistake it for the real thing.
KeroVee – Pitch correction/autotune plugin (output quality is much better than Gsnap).
Arptron – Soft synth with a lot of arpeggio presets.
GTG 13 – Clean sounding soft synth.
Texture – Yet another soft synth that comes with a ton of preset sounds.
Voxengo Span – A spectrum analyzer.
Analog Warfare – Because too many soft synths is not nearly enough.
Hurdy Gurdy – just to show you can get anything as a VST. 
And mind you, these are just the free plug-ins I’ve personally used. There are thousands of these things out there. The possibilities with a modern recording setup on a computer are just endless.