I have a theory that anybody who can hold a tune and sing to correct key can sound great if the singing is properly recorded.
I have just bought myself an M-Audio Fast Track Audio Controller*. It is basically an amplifier with separate controls for microphone and guitar input. The learning curve for the recording and mixing software is steep, but thank goodness, there seems to be a lot of helpful tutorials on the Youtube. So far I have only managed to install the software and successfully recorded a short audio clip with my voice and guitar. Once I have the works sorted out, I shall do a test recording to see if my theory is right.