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Cubase SE

You'll get a lot more info here
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I have cubase LE, and once I got past the hurdles of getting it all to funtion with no latency or other problems (once I learned how to use it), I love it.

Cubase LE comes bundled in a lot of products. Mine came with a ZOOM BT1U fx pedal. Not sure of the differnce btwn the SE and the LE but if you can get an LE for free with something else - it seems to do everything I need it to. I recorded the default song on my myspace page linked below (Britney Spears) with it.

For a musician, thus far I can't see any reason to go past the simplest version of these programs. They do EVERYTHING anyone would need to do to get a decent song down. I toyed with Nuendo for a while (the top of the line cubase program) and it only made my head spin. I think the higher end recording programs are for people who know precisely what they're doing and want complete control over every single aspect of the recording process. The cheap ones make it a whole lot easier by giving you a lot less choices and freeing up the creative process. Give me 200 reverbs and I'm going to spend 200 hours finding which one fits precicely into my mix. And then I'm going to change it a week down the line. :) And the only one who's going to know the difference... is me.
 
When I was looking to upgrade my Cubase LE program, I was told by customer service at Steinberg that SE is pretty much the same as LE with a few minor upgrades. If you can get SE for $40, it's worth it (if you don't need the additional hardware that is usually bundled with LE).

I upgraded to Studio 4, but it was primarily because I needed to be cross-compatible with SX3 (LE and SE are not). I have come to appreciate some of additional features of Studio 4, but they certainly aren't necessary for putting together good music.
 
I don't even know what half of that extra stuff is, so I guess I'm with the right program. :) Only thing I wouldn't mind having is the drum editor. I actually owned the original cubase (midi only) and learned how to use it pretty well because I didn't have the internet at the time to distract me. The drum editor was literally a dream come true at that time. I was ecstatic over it because you could do things that were unfathomable back then. Ahhh... had I not dropped the ball I'd now know what dithering was.
 
Yeah, but I can get SE cheaper today than LE bundled plus there is nothing that I want at the moment that comes with LE. And SE is a bit better than LE. Here is a comparison chart, if it helps anyone:

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Another difference is that LE does not support drag-n-drop. I use EZDrummer, which requires dragging grooves into the sequencer, which makes LE impossible to use. I just use Reaper instead of paying more to upgrade.
 
Alternately you can download Audacity for free, which I've found to be a great program, with a lot of the cool features of the higher end Cubase programs (time shift, evelope tools, etc), and uses a simple USB connection. As long as you have a 2-way USB device (I bought a Yamaha MW10 USB mixer) you should be able to monitor your recorded tracks along with what you are currently playing, so lag shouldn't be an issue. I've recorded several tracks with it and haven't experienced any lag so far, but Audacity's time shift feature allows you to very quicky take care of lag by dragging the track into the correct time if needed. Cubase SE/LE won't do that.