Boydie
I would recommend the a Focusrite Scarlett as your best "bang for buck" audio interface

There are a few flavours at the "2 input" price point so you can't go wrong

I haven't used one myself but have seen enough good reports to know I wouldn't hesitate if I needed to replace mine

If I was to buy my Audio interface again, I would go for this recommendation. The Roland Quad Capture has the headphones and the Amp on the same volume knob, which is a bit annoying.
 

jta, if the laptop is 17" it will likely accommodate a 2nd HD without swapping out the optical drive, both i've had did

Thanks I put the Focusrite Scarlett on my list of things to check out. 
 
I'm gonna buy or build a PC tower because I'd like to have a big monitor and faster specs for the money. My MacAir is plenty fast but it's got a tiny screen and just isn't real inspiring...for me. Would like to know if there are preferred chipsets and i7 or Xeons preferences? 
 
Anyone using NI's Maschine within Sonar? Or any other controllers with knobs/sliders etc.. ? 
 

I'm using Maschine (original) in X3. Works fine. I use an SSD for the library, it helps, although the Maschine samples are generally quite small and fit into RAM easily.

Scoot
To build on AT's comments about a second internal hard drive, on a Laptop this typically means going for Laptop with a DVD writer, that you switch out for a SSD. Not all laptops come with DVD writers now, as downloading and storing on much bigger hardrives is leaving them behind.

A good idea, but I'd have the SSD with the OS on it as the primary drive and the HDD in the DVD slot.
You could then use multiple hard drives if you wanted.
 
 

Welcome back, deepsessions. I came back in 2005 after a 10-year hiatus and was delighted to discover how far things had progressed during my absence.
 
I had to replace my audio interface this year. The old one crapped out at an inopportune time, so I had no money saved up for a replacement. Consequently, I did quite a lot of research before making that purchase, ultimately deciding to take a chance on a Focusrite product based on feature set, price, and others' good experiences.
 
10 months later, it's proven to have been an excellent choice. Half what I paid for its predecessor and only very minor feature compromises. Great support, too. Not the RME that I would have bought had I been able to afford it, but for 1/4 the price it's a good alternative on a budget.

deepsessions - you're marveling at how things have progressed. It truly is amazing.

Two out of the box suggestions for you. Why not open your computer search to a laptop. Even used laptops from CL might be out there with plenty of horsepower for audio engineering. Going mobile is getting with the times. Since I cut the cord from using a desktop PC my productive time on Sonar has greatly increased.

Second thing - seriously investigate using SSD drives. Everything will be spunky if you go that route. They are now quite reasonable in price.

deepsessions
Ah yes SSD drives must be the deal! How are most backing up? 
 
 

I use an external drive for backing up projects. Another external to "image" my OS drive.
 
My purchased samples are either on the orignal CD/DVD. If they were a purchased as a download (more prevalent these days) I have an external RAID-1 NAS. 2TB (actaully 2x2TB for full redundancy) where those downloads are stored.
 
Gobbler did offer a method to backup projects, but they are in a state of flux so it's hard to say if that is viable any longer.

Appreciate all the input guys! Things have definitely come a long ways. I used to have a room full of synthesizers right when all the emulator's were coming out. The sounds were just about there but the processing power to run them wasn't unfortunately. That and 3 giant 21" vga monitors haha.. Now I have the option of a big 25,27,30" flat screen haha.. 
 
As much as I'd like to get a big screen laptop and be mobile I've got a little one in the picture and need to keep everything away from her. Luckily I have a room I can use as a studio. 
 
Still curious as to what i7 chipsets you guys recommend? 
 

Sanderxpander
I'm using Maschine (original) in X3. Works fine. I use an SSD for the library, it helps, although the Maschine samples are generally quite small and fit into RAM easily.

Did you have latency issues before using a dedicated SSD? 
 
How do you like using Maschine does it speed up your work flow? 
 
 

Personally I think your expectations exceed your budget, I know... I've been there. Even if you have to do 24 month financing or layaway... go ahead and get what you need and want. Sweetwater has 24 month 0% financing on most things and Jim @ Studiocat will work with you on a layaway, of course you'll have to wait on your computer but in the mean time you can do small projects on your phone or iPAD or use Reaper on the cheap and save to get the machine, interface, monitors, mics, video monitor, phones, and everything else that you're going to want.
I may be off base and I really don't mean to "cross the line" or be offensive but I've been there and have been through the frustration of not having what I needed to do what I wanted to do. That said, it is a LOT cheaper these days to get there than it used to be. If you really have to stay under 500 bucks then be SURE to get a 7200RPM HD even at the expense of some gigs, get at least 4G of RAM if you want to go 64bit (and you do). A SSD will eat up most of your budget so forget that, you don't need it... so you boot a few seconds quicker, so what.
Think about what you want... think about it and then think about it again. Talk to some people like Danny Danzi, Jim Roseberry, and others. Talk to Beagle and Herb... they make good recordings and are level headed folk... and Karyn. They know more than I do. I mostly know that jumping before you are ready can cause you a LOT of frustration and spending money and finding that what you have wont do what you want to do is defeating.
Know, exactly what it is you want to do because there are a LOT of products that looks like they do everything these days. Some of them are geared to EDM and those are useless to me but gold to others.
My advice may be useless to you but there it is anyway... I hope you get what you want and what you need.
 
Julien