When I was in high school I used to record some shitty bands around here on a low-tech setup, and since I'm guessing you guys don't have much equipment, I'll give you the run down on what I used to do, because even with shitty equipment most of the recording sounded pretty decent anyways.
First of all, get a computer, with a decent soundcard, and get a good recording program. At this point, you probably can't record everybody at once and have it sound very good, beacause that takes a lot of equipment and stuff like that (and is probably best left for the studio.) But what you can do is track people individually. That's what we do, that's what I've had bands in the past do.
There's a couple ways to do it - band preference ftw. In high school the bands would usually lay drums down first. The guitarist would play for the drummer through headphones so he had something to go by, and then the rest of the instruments would be stack on that. Our drummer doesn't like laying drums down first, so we usually lay guitar and bass down. But we play to a metronome, which I definitely recommend.
Anyways, drums will probably be your toughest thing because I'm guessing you have limited microphones and you probably don't have a mixer. Try to find something you can at least run one or two microphones into so it isn't direct into the computer. I used to use a 25-year old tape deck for this. It worked pretty well, because I could cut the clipping on the deck, and then I'd record direct from the deck (not record to tape) and the drums would end up sounding about as good as could be expected from the equipment used.
Because we only had two microphones then I just rigged up two-overheads using duct tape.
I personally vote for buying equipment though, because you can double it as live equipment later. For instance, we have a PA system and a 16-channel mixer. We use it for practices, we can use it for live, and the mixer is great for recording. It has several busses so we can send some channels to one computer, some to another computer, etc.
As for microphones, we mic the drums at practice and at shows (obviously) so those mics are usually a good investment.
12/7 - Jon Oliva