at the prices you quote, you can't do this.
Don;t worry about 'digital', as the biggest thing you have to get results
happens before you get there... mics and positions.

if you can do with one mic, something like the AKG 535 will do everything
you want. at ~$200 it's great. a pair would be better.
rememebr stand/boom/cable
it's a condensor and you need a preamp that'll power it. there's bunches out
there from dollars to thousands. any of the small format mixers in the $300
range would get you that.
alternative would be a dedicated "mic processor"... a single unit that
collects mic-power/preamp/eq/compression in one box. very useful.

as to monitors, you can't judge what you can't hear and so you need to buy
the most honest sounding speakers you canafford. these can be found in real
hifi shops or maybe in guitar/sound stores. you need to take good recordings
and compare. you'll need 2, and whether they come with the power amps INSIDE
them or you buy the amp separately, you're looking at a bit more than $200.
Closer to $1k.

If you can;t afford even this MINIMAL level of gear. WAIT.
save your dollars and then buy. getting simple junk now will make you hate
the job, hate the results, and waste what little money you have as well as
your time figting it unneccessarily, and time waiting LONGER to get more
money to get what you could have had in the beginnging.
Patience is the HARDEST thing here, yet the ONLY thing that will not screw
you.
You can Do This, and it'll be a treat.

--
John I-22
(that's 'I' for Initial...)
Recognising what's NOT worth your time, THAT'S the key.
--

From: (Christine)
Organization: http://groups.google.com
Newsgroups: rec.audio.pro
Date: 27 Jun 2004 08:41:14 -0700
Subject: Help me equip my small beginner's studio

Hi - I am a songwriter looking to equip a very small home studio
(SNIP)
My main instrument is a piano - and I am purchasing a Roland FP-5
digital piano that has a USB port onboard...so I can plug that in
directly (right?). I also play guitar...most of my songs require
acoustic, but I have an acoustic/electric guitar. I also sing.
I have a background in audio prodution - took several college-level
multi-track recording classes

nothing you learned about mic technique and planning how to record and mix
is obsolete. It'll all come back to you.