I'm partial to Cool Edit Pro which has since become Adobe Audition for almost all of my digital mixing/editing/mastering.
Check out
this place for some interesting software deals.(Audition 1.5 is down at the bottom)
After reading the reviews it seems you'll want to invest in that 512MB memory card(looks like you can get them for under $50) and a good mic.
Seems to me you can get by with the 128 if you record and transfer one or two tracks at a time and multi-track mix it with something like Audition and then do a final stereo mix and burn to cd instead of doing it all in the Fostex.
I'm digging that it is battery operated and portable.
Sounds like an excellent tool for getting ideas down easily and quickly.
And I noticed that it has a S/PDIF out which means you should be able to record directly to your computer if your soundcard has a S/PDIF input, bypassing the need for a larger memory card.
Good luck.
Cletus