Computer based recording

Heavy quilts a effective and low-cost acoustic treatments.  Heavy cotton moving pads can be purchased for cheap - make a large "V" with a couple of big moving pads, and put yourself in the corner facing the opening.  This arrangement can kill a lot of echo in your room.

Forget about the 'verb, you've got NASTY electrical hum.  First thing is to find the source.

As for mics, stick with a dynamic, unless you want to put some serious time and money into clamping down the reflections in that room.  Check out the R0DE Podcaster.  It's an RE20/RE27 lookalike.  A dynamic USB mic, designed specifically for podcasters.  It runs about $200, and should eliminate the need to upgrade soundcards.  I've not used it, but R0DE claims outstanding A/D converters, and I have quite a bit of faith in R0DE.  Aside from that, some simple, basic acoustic treatment that others have suggested should be enough to really help, as long as you stick with a dynamic.

Emmett

http://www.rodepodcaster.com/page2.html

Thanks again! I purchased a few moving blankets and the new microphone this morning. Will keep you posted.

- Aanarav

And I might be in touch soon Aanarav for some advice when I make my vlogs with Premiere  

Absolutely. Feel free to send me an email:

Thanks for all your help. I'll be stopping by soon  

- Aanarav

Well, I took some of the suggestions and used them to record something different:
http://asvideoproductions.com/stuff/AudioSample_02.wav

How does that sound? And, how can I improve further?

Thanks again,
Aanarav

I think this recording is suffering from a form of crap mic syndrome; too toppy (too much treble) and not much else of the dynamic range of the speaking has been recorded. There's also some room noise, sounds like computer hard-drive. I think you're also talking too close to the mic, as if it were a head-mic. Better than it was, but not as good as it could be, is my opinion.

Thanks. I will investigate/adjust a few more settings and get back to you.

Best,
Aanarav