Since so many busters here entered the cover contest, or have musical hobbies, I would love to hear about how you create your music!

I'll start. For my cover, I used Magix Music Maker for the midi and recording. It was cheap (for this type of software) and did the job well enough. There's some mildly annoying bugs so I would not recommend it for frequent use but if you're on a budget it's fine. I would have liked to try out more tools if I'd had more time. >.<

I used Audacity for editing and cleaning up the vocals. It's free and works pretty well as far as I was concerned, I only did really basic stuff like remove extraneous breath noise, fade ins/outs, and normalizing. Would prefer something a bit better if I were doing more projects, if you're doing a lot of edits as far as I can tell you have to undo a whole chain of them if you realize you made a mistake earlier, even if it's on an unrelated section of the recording. But for the price of free, can't complain!
http://audacity.sourceforge.net/

As far as equipment... almost nothing to speak of, I used a crappy computer headset with a microphone and a crappy DIY pop filter (wire hanger + pantyhose!).

I do a lot of sketches on my phone or with Audacity, but I'll record with Sonar/Pro Tools/that kind of thing for "serious" recordings.

I've made sketches on my Gen 1 iPad running Garageband. The iOS is hopelessly outdated, with no option to update, so it frequently crashes and closes, but it gets the job done. I'd love to get a dedicated desktop DAW and interface, but I have neither the space for it, nor the tech skillz to set it up right.

I bought an Avid interface which came with a Pro Tools Lite kinda thing, and I was able to pass the signal, but I didn't have the know how to make quality recordings...