The programs educatedfilm suggests will probably do a nice job, but I've never really used them. I tend to stick with Cubase for sequencing/mixing (and adding effects if I can't get hold of the pedal). You can get version 3 for about £50, I think, but I'm not sure if that includes all the plug-ins. You don't need to record through the amp, but it is obviously better. I'd also recommend you get a nice amount of memory (512mb) which shouldn't be a problem with the current low prices.

Be prepared to spend a long time setting the stuff up (unless you're a whizz at computing (or maybe I'm just a moron)), having to deal with retarded soundcards, latency, thousands of setup options, spasticated operating systems that have some problem with you installing non-microsoft products etc. But in the end it is 100% worth it. I only use 4-tracks for sampling now.

Naturally after all of that you'll be wanting seperate editors (e.g. wav). The ones that come with the sequencers tend to be so-so.