Nice feature from the NYTimes on how video conferencing is growing up, and offers an outstanding example of someone using it to each guitar over the net.
My podcast production is similar in its simplicity. I have an old ElectroVoice microphone (albeit one of their nicer ND Series vocal mics) connected to my Mac via a TASCAM US-122 USB audio/MIDI interface (I got mine for under $200), and use Garage Band to record and mix the show. I could just as easily eschew the mic and US-122 and use the microphone built into my PowerBook, or my iSight’s, but that would be too easy