I know people with mega studios with the ability to produce to the standard of Dre, but churn out a load of shite, and I know kids on the dole (welfare) with an old atari and a s1000 who rip tracks up! It's all about how you use your tools. There is so much free software to do the job, this is what I suggest:
1.WIPE YOUR PC!!
Yep, backup whatever you gotta backup, then reinstall Windows. Do your updates, then disconnect it from all networks. Then only install music software and sound libraries. Ensure you have at least 1GB of RAM. Either have 1 hard drive for system and one for data, or partition your main hard drive for system and data.
If you are serious about doing music, you cannot afford to fanny about when you are in the studio. Treat it like a job. Don't lose interest or get sidetracked by e-mails or looking on the net.
2.GET TO KNOW YOUR SETUP INSIDE OUT
It might take you a year to understand it all, but so what, that's a steep learning curve and you'll learn every day.
3.PICK YOUR SOFTWARE AND STICK WITH IT
You basically only need 2 applications, a sequencer and an audio editor. Audacity is excellent, and free as an editor, and there are many free sequencers around. Google for them. As long as you can get sound into and out of the computer, you'll be fine. If you decide to buy a proper sequencer, make it either Logic, Cubase or Sonar. I use Logic 5.5 on a PC and Logic Pro on a Mac.
4.FUTURE PROOF.
Don't waste money on buying unnecessary stuff, like loads of plugins or a bigger monitor for example.Once you have started making beats, it'll flow, and you'll realise what you have to spend out soon enough, and when you do, I suggest buying second hand...loads of people upgrade constantly for no reason...I have a G4 running Logic 4.8.1 also in the studio, it's 8 years old...PERFECT STILL FOR MOST STUFF! I can't run all the latest plugs on it, but so what? Producers like Pete Rock, Diamond D, Paul C all dropped classic material with barebones setups upto 20 years ago!
5.DON'T GET PUSHED INTO THINKING YOU NEED LOADS OF GEAR
I use a Dell laptop with all my music stuff on it just for making rough tracks, but really if I didn't want to use anything else, I wouldn't need to. You can create, bounce, master & mixdown all within the digital domain, then send your stuff over the internet without ever leaving your house. You don't NEED anything else!
Your creativity is only as small as your imagination, it is not stopped by your equipment. I was tempted to buy an MPC a while ago, but why bother? I have a MIDI keyboard I use for tapping beats out, and in my opinion it would be a waste of money.
I hope some of this helps, and always search for information as there are shitloads of sites offering free tutorials, and loads of free downloads of sound libraries and the like.
Good luck, whan you done a beat, upload it here!
Peace.