Here is the setup that I use.
Software:
Audacity by Sourceforge. This is Freeware that will allow you to record anything that passes through your sound card onto your harddrive in a variety of file formats. It is free, reliable, small and stable. Download it and install it.
Nero from Ahead Software. It can be purchased at that site. Version 6 is the latest. I use version 5. This will allow you to create the CDs from your captured audio files created with Audacity. It will do tons more but that's another thread.
Hardware:
You will need a CD-RW disc drive. I'm assuming your PC has one. Without this unit you cannot "burn" CDs. A regular CD-ROM drive only reads discs.
Once you have the hardware and software setup, all you need to do is get a cable to go from your cassette deck's output (usually left and right RCA jacks) to your soundcard's input (usually a female 1/8" stereo jack). This cable will have male connectors on both ends...two RCA males on one end and a male 1/8" stereo plug on the other...and can be obtained from any Radio Shack or Electronics vendor. It will look very much like this:
Now, all you need to do is start to play your cassette tape audio and then start to record this input to your PC with Audacity. You should be able to record in MP3 format. If not, record in .wav format. Makes no difference. Nero will be able to convert either into the CD Audio format that you need to ba able to burn on to a CD.
Once you have this audio recorded and saved to a file, you can use Audacity to edit it, add fade ins and fade outs, filter out transient noise, etc, etc. You can get as fancy as you want. Just remember that you will only be able to record approximately 1 hour of audio onto a CD. The format that goes onto the CD is a much larger file than an MP3.
Once you've edited, you open Nero, use the Wizard to tell it what you want to create (a new audio CD) and then drag and drop your new file from the right side to the left side panel and then insert your blank CD-R media...not CD-RW...and click the "Burn" icon. Nero will process the file and lay it down on to your CD.
If you want to create CD labels and case label backs and fronts, you can use what I use.
CD Box Labeler Pro from Green Point Software. It's only $19.95 and you can pay for it online and download it in minutes. It gives you TOTAL control over every facet of printing CD labels.
That's about it. If I've forgotten anything I'll add it later or feel fre to ask any question you like.