Go free;
Reaper is excellent.
http://www.reaper.fm/Traverso also looks very good.
http://traverso-daw.org/Garageband is also perfectly capable, but I wouldn't spend money on it when those other 2 are available.
Røde NT-1A is a good all-round mic and in your budget. I hear good things about the Audio Technica AT4040 as an all purpose mic aswell. It also depends a lot on what instruments you plan to record?
One thing to bear in mind is you will also need some kind of audio interface and preamp for a mic (read:
http://www.thomann.de/gb/onlineexpert_171_1.html).
If you can save and double your budget you can get a good preamp with the audio interface and good mic.
Bear in mind, if you are not used to recording, haven't used a condenser mic before or whatever, then you will probably be surprised at how good any $100 condenser mic sounds.
In getting a great sound, the 'out of the box' gear (anything thats not software/computer) will always be more important than the 'in the box' gear. So, save your money for OTB gear, use the ITB gear thats freely available