I'm looking to turn a small chunk of room into a recording area for guitar and vocals...any suggestions on what I should buy
My price range is under 700 USD.

(My preferences are rich, warm vocals, so if that helps the vocal recording, much thanks appreciated).
Read the stickies.
For recording just vocals and guitar you could get a nice condenser mic and a firewire interface like the PreSonus Firebox

as for a mic, try the Rode NT1a with a pop filter.

You could get some fair sounding recordings with much less money, like a Shure SM 58 mic and a Mackie Onyx Satellite interface which would total about $300.
MXL v67 has nice warm vocals.. they sell on ebay for like... 150 bucks? less maybe? i can't remember but i have one and it stands up to my Audio technica at4040 very nicely.
Okay, thanks. Now, I got a lot of buying to do (I'm basically revamping my whole setup, guitar, amp, and recording equipment now.)