Hi,
The most important aspect is the acoustical space that you work in. Try and get this as quiet & dry as possible, so you can apply effects in postproduction, and get as little room reverb & other noise as possible.
This is what I do (it's cheap):
1) Use a small, manageable room with adequate space for your usage.
2) Plug window(s) with pieces of thick foam cut exactly to the window frame's dimensions, so as to filter most of the sound from outside. Most wholesale foam suplliers can cut this for you.
3) Put curtain railings against all the walls, and hang two sets of thick curtains (velvet works good) about 4inches apart against at least two adjacent walls.
4) If you use a PC and it's noisy (it will mostly be), put it in a closed cupboard or something - get the noise as low as possible, but remember you'll still need to access it frequently.
I've also experimented with switches on the front of the PC that switched off all fans (including CPU). This gives you about 2 mins of recording time with a decent heatsink before it start overheating (on Athlon XP 2000+). I won't do this again, because you can accidently damage your CPU.
5) Optionally, you can build bass traps for the corners of the room, by bending mesh wire (chicken coop wire) into tall cylinders, and stuffing it with quilt. They should be about 1 foot in diameter. If you want it to look good, you can upholster it with black fabric or something.
6) Use thick carpeting (preferably wall-to-wall)
The above leaves you with a very nice space to record 1 source at a time in. Good for voice-overs, or recording vocals for electronic music (what I do most).
the next step would be to put a window in one inside wall, and build a control room next door, but then you start speaking high budget :wink: