SoftSynth

The one "must have" is a host program, which would be Sonar X1 Essentials.
Soft synths are Software Synthesizers. Sonar comes with a few, but you can also use soft synths from other vendors with the program. They can emulate conventional instruments or have their own sounds, depending on the synth.
The concept doesn't really gel until you can play around with them, but they add a huge variety to the sounds you can use in a song.
Sonar X1 Essentials will give you a good place to get started. It isn't quite as elaborate as the Producer or Studio versions, but has plenty of power. There is a learning curve, so be prepared to study some. It is well worth it.
Here is an example of a song produced entirely with soft synths:
http://soundclick.com/share.cfm?id=10285834

I played all of the parts using a MIDI controller, which you may find is an essential part of your setup.
Welcome to Sonar. Enjoy the journey. It can be aggravating at times. The first few weeks are the worst, but once you get your footing, it can be immensely rewarding.