Sure u can use a mic, but then you have to learn about more things like how to get a good sound and what kind of mic to use and the placement etc., and if you use 2 mics it gets even harder... but always use your ears first

And if your amp is in the same room as your PC it's hard to really hear the sound through your PC, cause the amp interferes...(duh). Or buy very good headphones that are closed for sounds from outside.
But I would look for a nice modeller or something yeah... Most handy, just a little box with cool sounds. I use a Boss GT-6 at home now (check the 'Main' page of my site, there's music as a backgroundsound I recorded in Cubase with 3 presets (not altered) from my GT6, only gave it a little more stereo and normalized it using Wavelab. But don't mind the little mistakes heh.. I bended one note a bit too high and a little timing-thingy...), and before that my Engl 580's rec outs (rules!!!), but that's a bit expensive just to buy for homerecording. Just look on ebay or similar sites... Lots of Pod's n stuff... (I'm not a Line6 fan, but I heard great recordings with 'em. And these days they don't make crap... only Zoom does lol.. Oh yeah, I tested the Boss ME50 too, great little thing for $299 new price.. I guess you can get it much cheaper second hand. But it's a cool sounding thing and you can use it as a floorboard too. (3 pedals on it). Here is the URL to a site of a friend of mine, who recorded his stuff using a Behringer V-Amp. Very cheap thing, and he gets good tone from it, even while he sais it sux. But you have to tweak it a lot, and roll back the distortion. Check the mp3's :
http://www.roysegers.com.
And for soundcards, try to find a simple Terratec or so, not too expensive, and check the specs first. For instance the Xfire isn't made for serious audio recs, but more for games or just playin music/ watching films/ and other entertainment. M-Audio rules too. I really don't know much 'bout those cards, I'm only mentioning stuff friends use. I need a decent card too, and I guess I'll check those mentioned myself too.. Found some 2nd hand with zero latency at a reasonable price.
Oh yeah, some more samples and more info on the GT6, you can download patches there too :
http://www.bossgtcentral.com/exposed.php
Good luck man
grrz,
Frank