This is roughly a 22' by 9' space complete with a PA for vocals and bass, guitar amps, and a drum set. The PA consists of a couple of monitor speakers, a massive subwoofer (two 18" speakers), and a 250 Watt power amp. The subwoofer is way more than I need, but the deal was too good to pass up. I have a Samson S-Phone headphone amplifier that can drive 8 pairs of headphones for recording as well.
I have a set of Sure drum mikes including five SM57's for the snare, toms, or hihat, a Beta 52A for the bass drum, and a pair of SM81 condenser mics for overheads.
I use an SM59 or an SM57 for micing guitar amps, and a Sansamp Tech 21 Bass Driver/direct box for the bass.
It has been deadened with Auralex acoustical foam and the window and solid core door provide plenty of isolation to record live without bleeding over. For vocals, I have a Blue Baby Bottle condenser mic, an CAD Equitek E-100 supercardioid condenser mic, and an Oktava MK012 cardioid condenser mic. I also use these for acoustic instruments or the Sure SM81's to get a room sound.
This is were the mixing takes place. I run Cakewalk's 64-bit version of SONAR 8 Producer's Edition on a custom 2.33 GHz Dual Core with Windows XP Professional 64X. It's an expensive recording software package, but it's extremely powerful. I now use a PreSonus Firepod, which has eight XLR inputs with an M-Audio Omni for two additional inputs and Fostex PM-1 studio monitor speakers for mixing.