I've used the M-Audio Mobile Pre for about a year now and couldn't record without it.
The Mobile Pre is a USB device that allows you to hook up two microphones, or a microphone and a line level input (guitar cable) to your computer. It can provide phantom power over the microphone connectors so you can use active condenser mics. Also it gets all of its power over the USB bus so it does not require an external power brick so it would make an excellent travel companion if you needed to do recording on the road.
I primarily use it in conjunction with an Audio-Technica AT-2020 mic for podcasting but I do some music recordings of accoustic instruments and all the recordings have come out very well. It comes with a software package but I typically use it with Garage Band on the Mac and Audacity on the PC. On the Mac it is a simple plug and play process and I have never had a problem with it. Recommended.