I'm new to creating music on a computer, and my research, along with tons of positive reviews from others, led me to the POD Studio KB37 as a good all-purpose starting point. In terms of flexibility, this package is very hard to beat. The built-in inputs and mic preamps let you record just about anything, from guitar/bass and other electric instruments to vocals and acoustic instruments (using your own mic, of course). For these uses alone, the KB37 is a great way to get sound into your computer with minimum headaches. Simply connect the KB37 to your computer with a single USB cable. It's USB-powered, so you don't even have to plug it into a power outlet.
The hardware's MIDI keyboard and control surface open up a whole new dimension. They allow you to add keyboard parts and adjust some software parameters via real-world knobs and buttons; this is much faster than clicking and dragging onscreen "virtual" controls.
The included software package reveals the KB37's full potential, transforming an otherwise great product into an incredible bargain. Sure, the Reason Adapted (synth, sampler, sequencer, and effects) and Ableton Live (multitrack recording) software are the "lite" versions of these programs, but even so, they're very versatile and powerful. If you're fairly new to DAW software, trust me, even the lite version of Reason is pretty incredible -- you'll get a lot of use out of it. It includes tons of sampled real-world instruments, fully functional and tweakable soft synths, drum machine, sequencer, effects, and a lot more. It takes quite a while to explore its impressive capabilities. Once you do, you'll know whether you want to upgrade to the full version, which is available at a discounted price. But again, the lite verion will be plenty for many users.
Finally, you get Line 6's POD Farm software, which gives you an arsenal of stompbox and rack effects for guitar, bass, vocals, and just about anything else. On top of that, it includes amp, cab, and mic preamp modeling. You get everything that most guitar multi-effects units provide and then some. Because it runs on your computer, naming and saving patches is quicker and easier than stand-alone multi-effects units, and you can save as many custom patches as you like. And, unlike stand-alone units, POD Farm is expandable. Line 6 claims that the KB37 allows you to monitor your tone, complete with effects, without a latency problem (a lag between playing a note and hearing the output). This is not an empty promise. On my modest laptop, which runs Windows Vista on an Intel Core 2 Duo T5550 (1.83GHz) with 3GB of RAM, I experience zero latency problems.
All told, for the price of one guitar multi-effects unit, you get everything you need to start a home studio. If you're a full-time keyboard player, this package probably isn't aimed at you. As its name suggests, the KB37's keyboard has only 37 keys. So, there are probably better MIDI keyboard controllers out there for you. Plus, as a keyboard specialist, you'd most likely want a full version of whatever synth software you prefer. On the other hand, if you play guitar or bass and you want all the building blocks for tweaking your tone, adding vocals, effects, *and* getting your feet wet with powerful synths, sampling, and multitrack recording, here it is for a laughably low price.