What is good recording software for a computer to record guitar?

Answer 1

cakewalk and/or fruityloops

those are good for mixing and laying down tracks/loops.

for processing (effects), try waves. here's a link to musiciansfriend.com for it:
http://www.musiciansfriend.com/navigation/effects-plugins?N=100001%2b305250&Ns=P_Price%7c1&g=rec&page=1

Answer 2

The Line 6 Toneport UX1, Toneport UX2, or Toneport KB37. They all come with Gearbox and Ableton Live. I'm quite pleased with my UX1. Here's the site.