From a pure mastering standpoint, and considering you are using Audacity, I'd seriously suggest using the Normalize filter. Audacity is a very decent tool considering that it's free.
Normalize takes a recording and evens out the levels so everyone is consistently the same volume. It doesn't really degrade the quality as much as a lot of the filters tend to do. For the podcast I produce we actually only 1 recording (on my computer) over skype and I could explain the entire editting process in a rather short paragraph. We don't even have very decent mics.
If you're curious as what it sounds like, just pm me and I'll send a link over your way. Don't want to post it here as I'd rather not look like I'm needlessly promoting myself.
You can make recordings sound fairly presentable with very little effort in Audacity. Just have to know how all the little tools work.
The only reason I'd suggest getting a higher end recording program is if you want something a little more reliable (Audacity can very rarely corrupt files) or would like to do some more hardcore editting (like removing a background noise like a siren behind someone talking).
As far as equipment goes, I just use a Logitech Precision PC Gaming Headset. It's 19.99 at Amazon right now. If you really want to go cheap and still want some quality, I'd highly suggest the pawn shop suggestion BUT be sure to pick up a pop filter. Your levels peak far too easily without one, especially if you aren't controlling the tone of your voice all that well. You actually can't use one with the microphone I have, but if you go the pawn shop route and end up getting some type of mounted recording or studio mic, a pop filter should work fine. I haven't priced them in a while, but I can't imagine a pop filter costs all that much.
The only problem with the way I record is that since my headphones aren't technically "cans" the audio from them actually gets picked up in the microphone. If you can get some that close over you're entire ear you'll be far better off.
But yeah, in short, find a cheap, used mic with a pop filter and get some closed-ear headphones. If you have any mastering questions with audacity, just poke me via PM and I'll try to help in what way I can.