Yeah, you don't need a professional set-up to start making half decent music. Hell, you don't even need a professional set-up to record amazing music. The song is what's important.
I use reaper for mixing cause it's cheap and I have a DI box for recording. My recording partner (who lives in a totally different country) and I pass recorded bits back and forth, then put it all together.
I think we do all right, it doesn't take much, don't be intimidated by it. Sure, your first 20-30 songs are going to sound like crap while you learn it but who cares, it's all fun!
You can hear examples here: http://soundcloud.com/endureth