How to record external audio

Hi everyone.
Newbie with the Mac here. I recently bought the 24" iMac and Macbook Pro since I'm told that for multimedia, Apple's the way to go.

I am trying to learn how to capture audio to be able to edit it on my computers. Here's the gist of it.

I have music files that my friends have in mp3 format. It's music that they have written and waiting for me to add lyrics and vocals to. I don't have a recording studio or anything but do have a decent set up for vocals. Is there a way that I can connect my mixer/amp to my computer to capture the vocals as a separate audio file, bring it into a multi-layer software like Garage Band to edit it along with the musical file? Then make it as a complete song?

What kind of software, hardware, etc.. would i need to do this?
Long story short, I want to have a low budget recording studio so to speak.

Audacity or Audio Hijack will allow you to capture any audio you wish. You can input via line in, but a good USB Audio interface would be a good option. I have an Edirol UA1-EX that I use for vinyl rips, which is a very useful bit of kit with multiple input options. It cost around £60, and the software mentioned is free.

I think more specifically... how do I connect my mixer/amp into my computer? Do I need any other input devices? I've checked my computer and laptop and there's no RCA input/output.

See edit above - sorry.

preciated! that was very helpful.. I will look into those mentioned items.
Thanks!