A few of the basic elements are as follows:

You need to consider the acoustical environment if you will be recording any live performance. This means you will need to look into acoustical room treatments. (See the Master Handbook of Acoustics by F. Alton Everest for more info.)

AC power conditioners such as Furman Sound and others will be helpful.

An assortment of vocal and instrument microphones along with mic preamps. Don’t scrimp on the quality of any vocal microphones you may purchase.

A (dedicated) personal computer (Windows XP, Linux, or Apple) for use as a digital audio workstation. (See Carillon Audio Systems.) The computer should be an extremely low-noise design constructed and optimized for DAW use. Should be equipped with high-performance DVD-R/W and/or CD-R/W drives and perhaps a DAT drive.

An external (FireWire-based) digital audio interface such as Mark of the Unicorn (MOTU), M-Audio, etc. – avoid USB interfaces.

Multi-track music production software (digital audio sequencer) from companies such as Steinberg, Emagic, Cakewalk, etc.

Audio editing software (such as Sonic Foundry.)

Outboard (hardware) signal/effects processors and/or plug-ins (instruments, effects, sounds, etc.,) for music production software.

Outboard sound modules with MIDI interface.

Hardware and/or software based music sampler(s).

Multi-track digital mixing console.

MIDI keyboard/controller with pitch and modulation control.

Near-field monitor loudspeakers (such as Mackie HR824) and high-performance headphones (Sony, Sennheiser, Shure, or Ultimate Ears.)

High quality cabling to hook everything together; use digital connections whenever possible and use balanced (XLR) connections for analog audio connections when possible.
References :
An Introduction to Recording Studio Design
http://www.ahisee.com/content/rsdpart1.html

Recording Studio Design
http://books.elsevier.com/us/focalbooks/us/subindex.asp?isbn=9780240519173&community=focalbooks&ref=&mscssid=EQCLR92NR5N79HBBWX31VHPLULUH5RPB

Hal Leonard Online – Audio Technology & Recording
http://www.halleonard.com/featureResultsList.jsp?featureCat=630003&li=yes&location=Reference

Home Recording Studio: Build it Like the Pros
http://www.courseptr.com/ptr_detail.cfm?&isbn=1-59863-034-2

Music Books Plus – Build Your Own Home Studio Kit
http://musicbooksplus.com/build-your-home-studio-p-8840.html

Acoustic Treatment and Design for Recording Studios and Listening Rooms
http://www.ethanwiner.com/acoustics.html

Acoustic Design for the Home Studio
http://www.course.com/catalog/titlelist.cfm?category=Music%20Technology&subcategory=Music%20Technology&CFNoCache=TRUE&p=all

Master Handbook of Acoustics
http://www.mhprofessional.com/contributor.php?id=12239

About.com – Home Recording Guide
Set Up Your Own Home Studio
http://homerecording.about.com

Tweak’s Guide to the Home and Project Studio
http://www.tweakheadz.com/guide.htm

How to Build a Personal Studio on Any Budget
http://emusician.com/tutorials/emusic_build_personal_studio/
http://www.printthis.clickability.com/pt/cpt?action=cpt&title=How+to+Build+a+Personal+Recording+Studio+on+Any+Budget+-+Part+I&expire=&urlID=19745307&fb=Y&url=http%3A%2F%2Femusician.com%2Ftutorials%2Femusic_build_personal_studio%2Findex9.html&partnerID=99566

Cakewalk DAW Labs
http://www.cakewalk.com/PCResource/Default.asp

Electronic Musician
http://www.emusician.com
EQ Magazine
http://www.eqmag.com
LiveSound! International
http://www.livesoundint.com
MIX Magazine
http://www.mixonline.com
Record Production
http://www.recordproduction.com
Recording Magazine
http://www.recordingmag.com
Sound On Sound
http://www.soundonsound.com

I suggest only two microphones because I am a big fan of "Naturally Balanced Sound" recording technique. Although it is better suited to acoustic styles of music than to electric. But it could be adapted. This technique produces absolutely beautiful results.

In the extras of the "Once upon a Time in Mexico" DVD, director Robert Rodriguez takes you on a tour of his studio which includes the music production part of it. Definitely worth a look-see.

Good luck.
References :