A cheap basic system can be setup using a
Zoom G2.1u Guitar pedal as it acts as a PC USB Interface and comes with Cubase LE. There are a ton of great plugins to be had for free if you look, many are listed on my website also.
The only downside to this is that it is one channel at a time, although it outputs stereo it only accepts mono, this is for the stereo guiater effects like stero pong delay etc.
The upside, you get a smokin guitar pedal as an extra and it can be used in Recordign Interface mode to simulate different Amps and Micing positions as well as type of mics.
I have a full Pro Tool system now but still use my Zoom for a lot of stuff, Guiatr and VST plugins etc have a delay(Latency) which makes it hard to get the vibe while recording, if you use the Zoom and direct monitorig you don't get the delay and you can perform better.
Just my two cents.
Andrew