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1. Software gets updated to new versions, but I don't know of any significant advancements.
2. It doesn't take a lot of money to do this. You already have a sterio and PC with a decent sound card and CD burner I assume, so you just need the cable to connect them and the software to record it to your hard drive or CD-R.
3. Software: I use Nero Burning Rom myself, but for tape->CD other programs (like Roxio's) may be better.
Sound Card: Needs a sterio line in jack and good sound quality. I'de say go with a well known, well reviewd card.
Hard Drive: The bigger the better no matter what you are using it for.
For doing a lot of tapes, I would say just get them onto CD-R now and worry about editing them later on.

You gave me a lot of useful information and it sounds very similar to what the others are saying. I need a stereo, a decent sound card, a CD burner, the RCA/stereo cable, and a decent hard drive. I don't think I realized you could do the editing later, after you get the stuff onto the CD. This will help a lot because I usually don't have large chunks of time.

I can't get over how much things have changed since computers came along. Have you ever thought about how people in the music recording industry had to keep up or be left behind? While I was busy raising kids, the entire technology surrounding this stuff changed. Gawd, I feel old! < / rambling >

I don't think I realized you could do the editing later, after you get the stuff onto the CD.

Well, you can, but IMO you're better off doing your editing before putting it on CD. Usually what I do - and I helped a friend digitize a boatload of LPs and put them on CD, which is similar to what you're doing - is record first, as a single track per reel/LP/cassette/whetever, then take the digitized recording and split it into multiple tracks, clean them up, and burn the individual tracks onto a single CD to recreate the album. That way, you're not burning something raw and unedited to CD, only to burn them again later when you're done tweaking them