HI everyone.  I'm completely new to computer recording, and basically all recordings.  My wife has asked me to help her set up a sound booth in our closet so that she can do voice over.  I have the computer, babyface, and a shure sm7b mic.  I would greatly appreciate some advice:

1.  I'm using Audacity b/c it's free, but is there a better recorder out there?  My budget for a recorder is up to $300
2.  While I grow into this field, I need to do a quick sound test.  Can some one explain why I can't hear anything while recording?  I have the Mic on analog 1,  and speaker on  'Analog (3+4)'.  But I don't have any headphone output.  I've search the internet and apparently I've got to make a 'submix' of some sort in TotalMix.  I don't know what a submix is.  Could someone please walk me through this?

A million thanks.

Jim.