Personally I use Reaper DAW. It is amazing, doesn't take up a ton of your memory to use and is quick. The workflow is great and you can install the program to a usb stick so you have it portable all the time.
www.reaper.fm
The demo is fully functioning and is 60 days but you don't get locked out after 60 days. If you want to make money off your stuff a basic licence for reaper is $60 to sell up to $20,000. The full licence is $250 but you can upgrade later if you buy a basic licence for $190.
The updates are ongoing and it has a really good suite of reaper plug ins for mastering, effects, vocal tuning.
As for a midi controller I would reccomend it big time but pick up a usb audio interface as well as they come with hardware ASIO drivers which will give you zero latency from your midi controller. I have an m-audio midi controller and it is great. The new axioms have drum pads that you can load samples into like an MPC.
These can be picked up for about $100 for a basic model and they have phantom power for condensor mics. I would not go with a usb mic as you will get a lot of noise from the computer through the line and will have to crank your gain way down.
You could also take advantage of some of the android apps if your on android. Supreme MPA has pretty much replaced by MPC.
You can also go on looperman.com to get free loops but most people just want credit for their work if you use it in a commercial project.
Audacity is a great free program for editing WAV files to edit your samples before you load them into your DAW.
For VSTi go to
www.vstplanet.com or
www.dskmusic.com and they have a ton of free VSTs. You could buy royalty free sample packs and there are a lot of sites out there that sell them. Lemme know if you guys have any questions, I just opened my beat store a few weeks ago
www.tannasloan.com