If this is your first foray into computer recording, and assuming your overall level of recording experience is more newbie than expert, I'd say spend your money in the following order: 1) interface, 2) mics, 3) monitors. The interface will make it easier (or conversely, harder) to get the sound to the computer for editing/mixing/mastering, so if that's not working well it won't matter what else you have. A $6K Neumann mic won't help if the interface sux. Conversely, you can get quite acceptable recordings using pretty average mics. And you can mix quite well through decent headphones . . . I mix using Klipsch Pro Media computer speakers and it works very well.
On interfaces, the M-Audio stuff is good and reasonably priced. If you are going to multi-track and edit in GarageBand (or any DAW), then you will likely not need more than two inputs on the interface (i.e., you'll record guitar, then separately record bass, then vocals, etc) so there will not be a lot of simultaneous recording of everything (unless you're going for an early Beatles vibe). So the real key for the interface is to have both XLR and 1/4 inch inputs (so you can connect mics and keys/synth modules) . . .decent preamps on the mic inputs helps, but again at a basic level of recording don't get too worked up over differences in the mic pre's between units. An interface that connects to the computer via firewire will be somewhat better than USB, but for basic recording not a big difference.
The big difference depends on whether you want a physical interface to mix or you want to use the virtual interface of GB (or other DAW). That is, once you have the basic tracks recorded and you start mixing, do you want a physical mixing board to work with or will you be happy using the on-screen mixing board? Ultimately, a physical board is much easier to use, more flexible, more intuitive, etc., but of course increases cost considerably. You can get excellent results with either. Behringer, Alesis, and others make 6-8 channel mixers with USB interfaces in the $300 range that would be okay for home recording/mixing (and can double as live mixers for the band). You'll hear a lot about Pro Tools (it's the fav of most major recording studios), but it's expensive and until the current version required specific hardware interfaces. It's a great program, is industry standard, has a billion available plug-ins for every sound, effect, and doodad known to man. It would be something to consider down the road.
As for mics, as mentioned it's hard to beat the Shure SM58 for vocals, SM57 for mic'g amps, horns, and/or vocals. These are industry standard mics, and while there are certainly better mics for each application, you will find both of these in every studio and on every tour in the world. They are workhorse mics. For bass, your best best is to go direct to the interface (either via a DI Box or the direct out from the bass amp). Mic'g a bass amp isn't usually all that great since most mics (including the Shure's above) are not optimized for those low frequencies.
Others may disagree, but I'd spend the remaining money on one or two sets of good, sound isolating (i.e., over the ear) headphones rather than monitors. You can mix decently through headphones, and you'll need two sets to allow playback to your musicians for track recording (so the guitarist can hear the other tracks while he/she records the new track) and allow you to monitor what's going on unless you have a separate control booth. Most decent outboard computer speakers will suffice for final mix monitors (particularly if they have separate subwoofers), and will do as good a job as cheap "recording monitors." Said another way, unless you're going to spend $500+ on monitors, you'll get acceptable results using something like the Klipsch Pro Media computer speaker (or any equivalent from Logitech or whoever), so spend the money on the interface, mics and headphones.
