Sorry if this is a bit long and waffly, but I remember when I was considering getting going on PC recording that any info was a good thing...
If you read the Line6 forums it sounds like there are horrendous problems, but bear in mind that they are support forums, and 90% of the posts are "it's fecked, what have I wasted my money on?" - all the happy punters aren't posting on there.
I've got a lot of Line6 kit, and have had minimum issues:
POD 2.0 (bean) - no problems at all
POD XTLive (fully loaded with all model packs & bass expansion) - occasionally I have to re-calibrate the pedal, otherwise no problems
Variax 500 - haven't used it for ages, last time it was out of the case it was exhibiting a possible piezo problem, but more likely a loose connection, I'll get round to it...
Variax 600 - had to replace the nut when I bought it, and it has the "intermittent fault due to shorting out in the coffin" problem - I'll sort it out next time I restring it...
Variax Bass - not used it for ages until doing some recording yesterday, absolutely no issues (except the strings are a bit manky!)
The guitar issues are exactly what you get on "real" guitars - loose connections, cr@p plastic nut, etc - but people posting on the Line6 forums seem to miss that!
I didn't buy a toneport for various reasons. One of which was the Line6 update program (Monkey) told me that Gearbox or whatever program it was (I could get it free because of my XT) can't be guaranteed to function because my laptop's Hard Drive isn't up to it (I think it was DMA versus PIO, don't quote me - I spent a while trying to configure it but gave up. My wife's PC is configurable, I had the drives working both ways, but my somewhat older laptop just does it's own thing even after you've told it otherwise... :roll:).
Also, I don't use my POD XTLive as a usb soundcard because of noises like Indy described - not been able to help you there, sorry Indy, I put my problem down to a) clashing with my main soundcard (external digital/midi usb box by Edirol), and b) possibly something to do with this DMA issue on my hard drive controller. But I use the Edirol anyway, so I never investigated further...
Anyway, roland_rat, in my experience, Line6 kit is just like everything else - you get what you pay for. They have their share of f-ups, but stuff seems to get replaced if it's actually broke. The toneports look like a "magic bullet" to get started if you haven't got an audio interface yet. I understand some models even have phantom power for condenser mics etc (I bought a mixing desk to get that sorted!!)
The biggest problem I had setting up my "studio" was the "soundcard"/"usb" thing - mine is an Edirol UA-20, the cheapest thing I could find at the time. It's an external Audio/Midi 24-bit digital usb interface. Installing the driver, and getting my recording software to recognise it and profile it was a one or two day nightmare several years ago. I bought the Line6 gear after that was sorted when I found I needed to get decent amp modelling. It sounds to me like kellar and Indy's problems with the toneports were/are "soundcard" problems - basically "computer and periphal device" configuration problems - and in my limited experience you're going to get those sorts of problems whoever the supplier is!
When it comes to the amp-modelling, it'll be a matter of taste. I'm ok with Line6 amp-modelling sounds, but I have recently converted to a Vox Tonelab LE - I much prefer most of their models (no recording interface there though - might be a good choice on Vox's part - leave the dodgy computer bit to someone else...! :lol:)
For recording software I would definitely recommend Cakewalk. I use their Home Studio from several years ago, if I ever upgrade, it will be to Sonar. I know a few people that have used Cubase type stuff, and usability-wise it sounds to me as if Cakewalk scores more points... The Home Studio software I bought was about £100, it came with plug-ins - soft-synths, additional (and better) studio effects - and LOADS of help on getting started (how to use compression, eq, etc, etc). Four or five years on, I still haven't bought any other software.
I also use Audacity for vinyl to digital conversion (it came with a usb turntable I got last christmas), it's good for that job, but I wouldn't want to try multi-tracking with it!! I am interested in checking out the other freebie one that kellar's gone for - can't remember, was it Reaper? - sounds like that might be easier to use for multi-tracking.
Not sure how much help any of that is - but you definitely want to give it a go. Once you've got it set up, it is so much easier to use than the four-track cassette recorders that we old people had to use (and pay far more for!!) 15-20 yeas ago! And it's a lot cheaper than going to a recording studio :D