Thanks! It's not too terribly complicated, though you can spend countless hours twisting knobs in search of the perfect mix. My technical knowledge of how all this stuff works would fit on the head of a pin, but I've done enough of them to be able to muddle my way
through pretty well. I'll try to rattle off a few things off the top of my head:
First off, you need some recording and mixing software. I use Adobe Audition (formerly Cool Edit), and there are lots of other choices out there. I think a lot of Mac folks use GarageBand, but I don't know a whole lot about it. Audacity is free and works pretty well - you can find it here:
Audacity: Free Audio Editor and Recorder
For Windows folks, optimally you'll want a decent sound card, such as those offered by M-Audio or E-MU (which seems to have been acquired by Creative?), or even a higher-end Sound Blaster. A lot of folks with laptops use an external sound card box, as they often come with lousy sound cards with latency problems. But you can give it a try with whatever sound card came with your machine and see if you're satisfied with the results.
Typically someone acts as the producer, starting with a framework of some kind, such as a mix with drums and bass and maybe rhythm guitar. The framework may even contain a click track if needed, which can be removed in the final mix. An mp3 of this framework mix is then posted or sent to the other players. The players contribute their individual tracks, synced with the framework track, to the producer, who then puts together the mix. So, a contributor would start out by placing the framework in Track 1 of the recording/mixing software, and then play along with it, recording on Track 2. Typically people record at CD quality (44.1kHz). To produce a file that is synced with the framework, you then mute Track 1 and do a mixdown. Syncing in this fashion makes life much easier for the producer, who then doesn't need to fiddle around with the timing for the start of the track. In a lot of cases folks just send high-quality mp3's (160kbp or higher) to the producer, but it is nice to use wav files if you have the room and bandwidth to share them, as compressing the file multiple times isn't optimal for sound quality. Make sure to record your tracks at a level that doesn't clip, leaving your producer some headroom.
It's usually best to let the producer handle the effects. particularly reverb. It can be a nightmare trying to get multiple tracks with different reverbs on them sound like everyone is in the same room. So sending your track to the producer "dry" will save him or her a lot of grief.
There are tons of plug-ins available for effects - I have some VST plug-ins that are amazing. Aside from the great selection of reverbs, one of my favorites is the Multi-Maximizer. Most home-brew recordings are much lower volume than a commercial recording - the Multi-Maximizer allows you to boost the volume substantially without clipping.
As a side note, if you are doing a cover that will mimic an original recording, the original recording can act as the framework. Just make sure that everyone is using the same exact mp3 of the original.
It is usually a common courtesy for the producer to run the final mix past the players to get a thumbs-up or thumbs-down before putting it out there for all the world to hear. The players may have some great input to tweak the mix.
One of my favorite efforts was what was referred to as an "inverted cyberjam". In this case, the producer sent out just an original guitar melody, and the object was to build a backing track for it. I was absolutely amazed at how different the results were - it was a very cool exercise.