Making home recordings on CD   is  great fun.  Not only will you have a CD to share with everybody, you become a star in the process.   To begin, there is a tremendous amount of equipment available, so I will narrow it all down right away. 

Here is what you need:  A digital home recorder, at least one good microphone, some kind of "effects" (such as mixer with digital delay)  a keyboard that can make a variety of sounds and a good pair of headphones.   With these five items you can create a "band" on CD, through the world of multi-tracking.

Digital Recorder   TASCAM makes a fine 8-track deck (as does Yamaha, Roland and other brands).  The basic unit is the DP-01, but the DP-01FX has effects (echo, guitar effects  and others) built right in!  The DP-01FX/CD has a CD burner built into it.  For the money, this is a great unit and quite simple to use.   Also availabe on eBay are digital recorders that take Mini-Disks, such as older SONY models.  This might be a good way to start, since these recorders are fairly inexpensive, but of course don't have a CD burner.  This means you will have to hook it up to your computer and put the songs in  before burning  a CD.  If you are recording a live drum set, you will need more tracks (usually 5 for drums) so you may need a recorder with 12  or 16 tracks to get the whole band.   A word of caution.   Some  8-track recorders, will only record two tracks at a time.    They will play back all 8 track, but not record them all at once.  So you will have to plan accordingly.

Microphone.  A wise man once tol me, "Even if you have a $5,0000 recorder, if you have a $50 microphone, you will get a $50 recording."  How true.   Good mics can be found on eBay for around $100-$150.   A favorite  is an ADK A-51.  For the money, it's unbeatable - very clean and open.  However, good mics require something called "phantom power" so be sure your deck has it, or that you have a separate Phantom Power unit, or mixer,  to plug your mic into before pluging it into the recorder.  Other good mics, which do not necessarily require phantom power are AKG, Shure and Superlux.   Be sure to check the eBay page to see if the mic you like requires it.   Very important!

Effects are important.  Without a touch of echo, vocals sound flat.  This is also true for acoustic guitar and other acoustic instruments.  It give space and dimension to the individual track.   A mixer, such as a Behringer, is a good investment.  Not only does it have effects for mics and instruments you plug into it, it also has a lot of effects, from simple echo to crazy distortion for electric guitar.  A Behringer mixer, with effects, is in the $100 - $150 range.   Worth it!   There are also many other fine brands of mixers.

Keyboard.   Yamaha and Casio have some wonderful little 61-key keyboards that have rhythm accompaniment, as well as a host of instrument sounds, usually 100 or more!   You can get a pretty good keyboard for under $100, though not necessarily new.   High quality keyboards, such as Roland, Yamaha Motif, and Ketron, will sound better but they will cost $1,000 and up.   When recording a keyboard into a digital recorder,  go "direct line."  This means,  run a cable from the Line Out of the keyboard directly into the recorder.  You will be able to hear it through your headphones.   And, you will get  a better sound if you run a stereo line out of your keyboard into the recorder.  This might require a stereo plug, a Y connector and two cables to go into your recorder.  If you are using the keyboard rhythm accompaniment, stereo adds greatly to the sound of the recording. 

Headphones.    The best headphones are Ultrasone, bar none.  They are the cleanest and best-sounding of any headphone made.  They are also expensive - around $250 full price.   And yet, on eBay, you might find a good deal.   The next best  are Yamaha - which have round ear pads but do not fully cover the entire ear.    You can find these for around $50 or less. 

Basic Recording.   Using your electronic keyboard, record the rhythm on one or possibly two tracks.  You will have to sing along with just the rhythm, but you can do it.   When the rhythm has been recorded (say, on track 1), add piano or other keyboard on tracks 2 and 3.   Wearing your headphones, you PLAY BACK the rhythm while you RECORD the piano.  You just play along with yourself!   Next, add bass (via the keyboard - they all have bass instruments)  on track 4.   Add guitar on track 5.   You still have three tracks left - what would you like to put on them?   Lead vocal and 2 harmony tracks?   Lead vocal , harmony and maybe a 2nd guitar?   You're the producer, so you decide. 

I  realize this is extremely basic, but it may help someone who is just starting and is wondering, "What the heck do I do?   What do I need to get?"   It's a wonderful adventure and you will find many to help you along the way.   Good luck!