Voice Over for Flash

I am doing a flash intro for the web that will contain music and Voice Over. I need to purchase some sort of sound importing device (microphone, digital voice recorder…) and a sound editing program that I can edit the music, add the voice over, and save it small enough to be used in flash. Does anyone have any recommendations on hardware, and software. I dont want to spend to much money becuase this is not something that I do all the time. Also how small should my audio files be?

THANKS!!

use any editing soft you want.
Buy any mic you want.
Make it as small as possible.
Voilà

Audacity is a free sound editor but to put it in mp3 you need an encoder (which i suppose there are stronger ones and maybe funky sound mutating ones or something becuase somehow that is suppossed to be a plus.