ok, so my band is on a recording frenzy, but of course, everything is getting mangled into one track when we record up to 3 guitars, 2 bass guitars, 2 keyboards, and 1 drumset. we need a way to layer everything so the drums and everything isn't overpowering everything else. we have a way to record everything into MP3 format and everything, we just need something to layer tracks over each other. thanks in advance.
have the drummer play to a click track and record him first, then record bass, followed by each guitar part and so on.

if you dont have a firewire interface with enough inputs for each instrument you cant record it all on each track live in one take.

what software and hardware you you using now?

you could use Reaper if you are recoding on a PC
i don't really know much about our track mastering coz the lead guitarist takes care of it. i know he uses Audacity.

as on how we record now, we play and we have a huge dymanic mic in the middle of the room. In the centre of the room is our vocalist, surrounded by me, the lead guitarist and sometimes the 3rd guitarist. then behind us are the bassists and then the drummer.

and we are using a PC to record.
Record each instrument individually and layer it all together in Reaper.

It's fun to record live, but with that setup, you're really not going to achieve much, in terms of separation and mixing, as you probably have already discovered.
There is poetry in despair.
one mic....hmm, not much but even still you could play each instrument on its own and layer it up. your audio will come out much cleaner. It will take some time to get the drums sounding nice with just one mic though...

Just have the drummer record to a click track, then take out the click and stick the drums on the playback track letting the next person record. Use headphones to let each member hear the previous tracks so they can play on time without it bleeding into the mic you are using. When you go to sit at the PC to mix and master be sure to try and get some desktop studio monitors as they work best for this type setting.