On the cheap. Goto Radio Shack and buy one of those $40 digital recorders and one of their $10 microphones. Worked to roughly (and I mean roughly, the external mic helps alot) put down our material over a two month period.
Not on the cheap (especially depending on your laptop's power). We snagged a Presonus Firepod
link . Use Cubase to record our tracks. There are cheaper and simpler alternatives, but after we learn the software well enough we should be able to pump out Semi-professional cd's. If you have no recording experience the complexity of the software is overwhelming, but nothing that can't be learned, reading the manual helps tremendously

. But you really need to look into if your laptop has enough horsepower to be a DAW (Digital Audio Workstation). I'm running an AMD XP2200 w/ 512MB of RAM and I still have to set the firepod's latency to 10-12 mS to avoid popping. I'm going to stop here. I myself was completely clueless to digital recording (or analog for that matter) until last month and I could go on for days on what I've learned. Google: home recording studio, or ,live band recording, or ,digital recording, etc.
It really depends on how much money you, or the band has. Realize that counting mics, cables, etc. You're looking at $1000.00-$1500.00 to building a decent digital recording setup, and that's not counting the computer. Now if you already have the drum mics, hp's/hp amp,cables, etc. You could look at just getting a digital mixer
this looks very nice indeed.
Either of these can turn into a money maker down the road. Once you learn the hardware/software you can offer recording services for bands in your area.
Develop a love for coffee, goto your local TotalitarianCorporate bookstore (Borders,Barnes-n-Nobles,etc). Find two or three books on the subject. Purchase a litre of their high-test and spend a day reading those books in their cafe.
Good luck.