Cool, ok, well maybe he thought your tuner clip was a mic (they look pretty similar!), maybe he's not so experienced in recording, or maybe he rocks out to the lo-fi sound!
Whichever it is, a shure 57 or 58 is going to get much better results,while still being super cheap. I'd like to see someone try and record vocals with a tuner clip mic

clip-to-the-lip?
You do not need a external hard necessarily, the way internal hard disks are connected INSIDE desktop computers is a lot better than firewire or usb BUT you will need one if...
-You need more space (duh

), audio projects can be big!
-You only have ONE drive on your pc and its the main system drive (projects need to be on a separate drive really, though you can get away with it to begin with)
-You are using a laptop
But they are pretty cheap to pick up if you need one!
FunkMetalBass makes a very accurate comment though! Recording is a black hole for money, even some of the biggest studio's in the world have lived there life on the edge of closure down to the cost of buying and maintaining the damn stuff! But you gotta love it, plugins have helped a lot too, they rarely go wrong and when they do they normally don't cost anything to fix!