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how do you do it?

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Heres an album i made(mp3's) with a multi tracking program you can download for free and purchase for 50$ after about a week or so of free use.. it provides drum samples and other sounds to work with.

if these tracks sound like something your trying to do let me know and ill tell you more about which program im using.
 
I bought a M-Audio Fast-Track USB interface at a discount from Best Buy - $99 list price - it's basically just a preamp that has a 1/4" in, an XLR in, and a USB out. Comes with the "Session" software, but I've been using CoolEdit Pro for a while, and know how to use it, so that's what I'm sticking with.

I haven't had any issues with lag or "latency" in audio-speak, and it's pretty clean. Even provides phantom power for mics.