It takes a lot of time and effort to do this, so you should try to get the best sound for the least effort. So don't use a USB input or the mic input. These restrict the quality you can get before you even record. They both use the factory sound card, which are usually mediocre at best.
Read up on sample rates. I use an M-Audio Audiophile 24/96 sound card - new about $100, used about $40. Run a line level input to the card, or S/PDIF digital (if your system has digital out). Use Audacity or Roxio CD Spin Doctor to record and remove some of the more egregious pops and hiss, cut into tracks and label. Save as Apple Lossless format to iTunes. From there you can play through your computer, output to your amp, burn CDs. More money yields better sound, but one must be reasonable.
Read up on sample rates. I use an M-Audio Audiophile 24/96 sound card - new about $100, used about $40. Run a line level input to the card, or S/PDIF digital (if your system has digital out). Use Audacity or Roxio CD Spin Doctor to record and remove some of the more egregious pops and hiss, cut into tracks and label. Save as Apple Lossless format to iTunes. From there you can play through your computer, output to your amp, burn CDs. More money yields better sound, but one must be reasonable.