You will have to buy 'something' and no matter which way you go the price adds to about $150. I was considering going the line-out route, but the only input jack I have on my laptop is a microphone one, and from what I've read these microphone jacks tend to record in mono, not stereo, which doesn't sound ideal. Yes, I'm using Windows 7 (oops, forgot to mention).

Then make incremental improvements to your setup over time Likely the simplest way to record to from the audio line out and use something like Audicity. Apple Macs have this software buillt-in but if you are usiing a Windows PC there is some work you need to do. This captures the performance but the sound is generated by software on your computer.

(1) You can record the audio output from the line-out jacks onto your computer. Would I need anything else (e.g., a synthesizer)? Does Yamaha Musicsoft Downloader have a synthesizer built in? If not, could anyone recommend one? Does it matter how much I spend? (Note that I will be recording my playing on my digital piano and then uploading that MIDI data to my computer, so key lag isn't an issue.) I've already installed Yamaha Musicsoft Downloader, but I haven't got the cable yet. As far as I can tell right now, I'll need: I'd like to create some MP3s of my piano playing.

Yamaha music soft downloader