Audacity is a free, open source software tool for recording and editing. I LOVE it. It's feature-packed, easy and quick to download and install, and even the beta versions are very stable and fully supported. I've never had a problem with it through a few releases.
It's pretty full-featured. I've yet to encounter a need to do something that I couldn't with Audacity. The GUI is very well done and very intuitive, and comes with a large number of effects and analysis tools, including DSP functions such as filtering and making FFT's of the sound source.
It's VERY GOOD at exporting .WAV files as MP-3's.