Hands downs THE BEST free recording software is Reaper - it does pretty much everything that Protools and Cubase SX3 can do including midi. It also comes with a load of cool plug-ins (compressors, delays, reverbs, EQ) - best of all you can download it for free (no annoying popups or crippled features) - if you like it you are encouraged to make a donation to the developers.
Use this software for recording, editing, sequencing and producing.
http://www.cockos.com/reaper/download.php