I use an iRiver 799 to record, a great little thing, records straight into mp3 format, and you can fiddle around with mic levels etc.
Since podcast 12 I have been using this binaural stereo mic, the high sensitivity version – sound seeing tours are MUCH better in stereo (Before that I used a similar mono lapel mic.) You need an extra adaptor lead though as the jack is too fat to plug straight into this i-river – I believe they solved this with the iRiver 899 by putting the mic input on the side.
For a more ordinary looking mic, without the stealth of the lapel mic, this Sony is meant to be great – but not as good for picking up ambient sounds – more of an interview mic. If you don’t mind doing all your podcasting from home, a cheap headset that you can plug straight into your computer will record just fine.
For editing I use Adobe Audition, and all my podcasts are hosted for just 5 US dollars a month at Libsyn. For more information check out podcastalley, where you’ll find lots of information on podcasting equipment and software, and really useful user forums.
Give it a go!