Audacity (audacity.sf.net) is a free sound recorder, with a long track record among guitarists and amateur producers as a terrible program. Here on UG, you're immediately told never to use Audacity, ever. But is the problem really that Audacity's bad, or just misunderstood? (Spoiler: It's the second one.)
What Audacity isn't for
Not all programs that record sound are supposed to be used the same way. When you're producing audio professionally (or trying to make people think you do), you're expected to use a DAW (digital audio workstation), like Reaper, Pro Tools or Cubase. (Reaper gets recommended a lot on the UG forums, but just in case it hasn't been recommended to you specifically, do check it out. It's a great starting DAW.) A DAW has features like grid snaps (which make editing more precise), sequencing (which lets you use virtual instruments like Superior Drummer or NI Kontakt), and advanced routing, but the most important thing a good DAW has that Audacity doesn't, is non-destructive, real-time effect support. Let me explain:
In a DAW, effects can be added to a track and tweaked in real time, or while the audio plays. This is super important for equalization. Equalization (or "EQing" if you don't wear a pocket protector and a bow tie) is an effect that lets you control the different frequency bands in a given track, and it's probably 90% of the reason your garage band's mix sounds terrible. EQing is kind of a big deal, but to do it well, you have to hear the results in real time, and this goes for all the other effects that get used a lot in production (compression, delay, dubstep wobbling) too.
Audacity lets you edit audio that you record, but the editing is destructive. You can undo a certain number of effects, but once you save the project and close it, that undo history is gone, and any changes you make are permanent. It's like a mixing board: once the knobs are set, and you record something through it, you can't un-mix the audio. And those effects can't be edited in real time, which means that EQing turns into a cycle of frantically hitting the Preview button and changing one knob at a time. And worse, you're stuck at the effects screen until you're SURE you've got it right, which means you can't do anything else.
If you expect to get a good mix from whatever you're recording, then you're best off using something more full-featured than Audacity. It's just not geared towards audio production, professional or even amateur.
What Audacity is for
Your computer probably has a program for recording sound, unless you're on some weird custom OS or your grandma's hand-me-down 386. It's easy enough to use; plug in whatever mics/instruments you need (or use the built-in mic your computer definitely has because come on, it's 2013), hit Record, and rock out with your rooster out. You end up with a WAV/AIFF/MP3/whatever format Macs use (vinyl, probably) of your glorious shower routine, which you can then post all over the Internet for people with low self-esteem to laugh at.
Audacity is the upgraded version of that.
Audacity has that big red Record button, and the recording process is the same if you just want to use it like your other sound recorder. Load it up, plug in, hit Record, and immediately get stage fright. (You're in your own bedroom, you know, there's really no excuse. Your teddy bear thinks you're doing a great job.) But after that, Audacity lets you do so much more. If you want to, say, layer guitar tracks for a harmonized melody, you can just record another track. You can adjust the volume and panning of each track (i.e., Mixing 101). If you don't have a metronome, you can lay down a click track (basically a series of metronome clicks) to play over. You can do basic trimming, fading (which is super easy), and normalization (which makes your track loud enough for people to actually hear, hint hint nudge nudge). Hell, if you really wanted, you could even record scratch tracks in Audacity (with a click track), then drag them into a proper DAW and do some real mixing.
Audacity is actually really useful for tracking simple (really simple) demos, and nabbing ideas as you come up with them. Especially if you have a mic'ed amp or DI box (say, a Pod), you shouldn't be ashamed to open up Audacity once in a while, as long as you know what it is, and isn't, capable of. Besides, it wishes you would call more often.