Portsound570,
Your question is very open ended.
There are many capable software sequencers out there; it's really just up to you what you want. The great thing is you can demo a lot of them - so demo as many as you can and pick the one you like best. If you don't know how to use it, d/l the manual, go to the help menu, search google for a tutorial on it, or go to the specific user group/list for it and ask questions - problem solved. In other words, don't just sit there - get your hands dirty. Here are a few you might wanna check: ProTools LE, Cubase, Logic, Sonar, Acid, Live, Digital Performer, Reason, Samplitude, Cakewalk HS, Fruityloops, etc, it just goes on and on.
There are also many capable USB/firewire soundcards out there. If you're a beginner, figure out how many inputs/outputs you need, and if you need any preamplifiers (pre's) - that depends on what you're gonna record. The options are endless here. Again, just get something and start getting your hands dirty.
Really, you need to read, research, learn, and then repeat. Once you get gear continue by recording, analyzing, learning, and then repeating (or not repeating if it's not right). There are a million things that go into great recordings, and if you're expecting to step right up and make "demo quality" recordings, well, that's probably not gonna happen. Gear allows you to record, and does effect quality, but in the end, it's your experience/knowledge that will allow you to make "demo quality" recordings. So start getting that experience and worry about the "demo quality" recording later - hell, in a few years you'll understand that a "demo quality" recording only partially depends on your sequencer and soundcard anyway.
