Couple of things

1) how much do you want to spend
2) exactly what do you want to do (is lots of simultaneous I/Os important for recording say a live drum kit)

as far as the software is concerned I think it is pretty much a matter of preference. I know a lot of people (including myself) who have been very happy with Sonar however by the time you have bought a bunch of plugins it can get very $$.

As far as an I/O goes, what sort of sound card do you have ?

Can it except S/PDIF ?

If all you want to do is record guitar what about a pod xt (which can act as a USB interface / sound card) ?

Another thing to look at might be a line6.com tone-port

It may well be that the sound card will do as far as an I/O device goes with out the need for a USB interface.