PC Recording:
I would use Mirillis Action for recording. It's not as known, but it has a great User Interface and will record games, desktop, or a screen region. Also can record commentary on the video if you want. File sizes are also better than fraps and quality is great (FULL HD)
Console Recording:
If you want to record consoles, Xbox 360 or PS3...
Lower Money, some people just use an easycap which I think is $10 (I don't recommend now a days because of the High Quality expectation on youtube)
Some Money, Roxio Game Capture or the HD version ($50-$90)
More Money, Elgato Game Capture is my pick it's far outdone the HDPVR 2 both in the $160 range.
Video Editing:
If you're short on money use movie maker if will do fine as long as you don't use picture in picture.
If you have some money I suggest; Power Director, Sony Movie Studio Platinum, or Adobe Premiere Elements all under $100
If you have lots of money get Sony Vegas Pro.
Audio:
Audacity is great for audio and is FREE!!
PC Hardware:
PC hardware is a must of course. There are plenty of guides online.
GPU is best for actually playing the games and getting higher framerates..
CPU for running the games/recording software comes more into play when you are using editing software..
Ram is more useful for editing 8GB should be best, unless you plan on combining clips from 30 different videos at once then you would need more.
I would agree with 2 HDD's either internal or having one external with usb 3.0 Having one HDD dedicated for the video's destination is very helpful.
Microphone:
low on money, I got Turtle Beach at Fred Meyer for $40 if you don't have one, I think Best Buy has them for $50. They work pretty darn well.
Higher Money, go for the Blue Snowball or Yeti. Either way it should be a goal to get one eventually anyway.