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2 Person practice and recording setup?

So my wife and I have finally decided to put some mutual time into music. She plays keys, and I of course play bass. So the ultimate goal is to have some sort of setup with my PC such that we can record together (single instrument at a time or together, doesn't matter), but we can also use the same setup to practice together with midi tracks, drum machine, or CD samples. We'd be doing almost everything through headphones, as all our time is after the kids are in bed. To have two seperate mixes for headphones is a plus, but at a minium we would have to control the volume seperately. Apparently I like mine loud heh.

I just built a new PC late last year, but it only has the on-board Sound Blaster Platinum or whatever it is. It's a fairly beefy system with 2GB RAM, decent process, and plenty of HD.
 
You can't go wrong with Ableton Live. And with careful tweaking of the panning you should be able to muster up two monitor feeds. However, it might pay to look at a USB audio device with two monitor feeds of it's own then you can bypass the whole latency issue with live monitoring.
 
I may just suck it up and use one monitor feed, should be plenty really. I figure as long as we can both hear each other while practicing, we can always record one-at-a-time with whatever mix we want.

Actually, right now I'm thinking about the Presonus Firepod. Plenty of inputs, does midi, has a headphone out. I could either split the headphone out or pick up a seperate headphone amp.