I am doing my podcasts very simply.  That may be good for me (pretty cheap) but bad for my listeners if my audio output isn’t that good (I actually think it is AOK, but I know squat about audio really). 

My primary setup is basically a Plantronics DSP-100 Digital USB microphone for getting my audio voice in, and Audacity for Windows for capture, editing, and output (I am beta testing MixCastLive).  This all done on a custom designed Windows XP SP2 system at home.

Others are doing some significantly cooler audio engineering work:

• Hugo Schotman (one of the first)
• PodcastRigs (by Paul Figgiani who does the excellent ThePoint podcast)
• Reel Reviews Setup (with podcast commentary)
• IT Conversations Setup (aka Doug Kaye)
• Bret Fausett’s Setup (Internet Pro Podcast)
• Engadget
• Random Bytes
• Phil Windley’s Technometria
• Lisa’s Mobile Setup
• GarageRadio.net
• GeekNewsCentral (Todd Cochrane)
• Podcast Tools
• Dave Slusher (Evil Genius Chronicles)
• Adam Curry
• Podfly
• Michael Lehman’s How To Podcast
• Adrian @ Linux Log

Also check out the excellent sites: howtopodcast.org & Behind The Scenes for good "how to do podcasts … from recording to posting."

UPDATE: Jake Ludington on recording and publishing are good new references. And Eric Mack has pictures and details on his "mobile setup."