SM58s (vocal) and SM57s (guitar) are great however they do use an XLR output. Most sound cards cant cope with this and you will need an adapter. You will also need to go into a mic input NOT a line level input. The best thing to do is toy use a preamp with a dedicated channel strip which will bring your lowZ mic line signal up to line level or even digitize it if you want as well as allowing you to tweak EQ and compress before it hits your HDD

A DAW is a Digital Audio Workstation. I like Korgs D1200 MK (http://www.8thstreet.com/product.asp?ProductCode=20641&Category=Recorders) I however their are plenty of others out there. If avoid Zoom and Boss DAWs

The Line 6 Pod V2 (http://www.music123.com/Line-6-POD-V-2-i70417.music) has been superseded by the PodXT however a good condition Pod2 will be not only adequate but also cheap.

Oh yes, Id avoid Musiciansfriend, they are not very good. I normally use www.music123.com or www.8thstreet.com.