The budget way to handle it is to use Skype and their voice recorder  (can't remmeber what they call it, just Google it)  or Zencastr. I'd recommend Zencastr because the audio quality is going to be considerably better.  If the audio sux, nobody is going to listen.  Get the $20 per month package.

You'll also want to have a decent or better than decent quality microphone on each end... Personally I use the BlueSnowball it's on the cheap side.  I'm happy with it, gives me good sound quality, but I don't know if I'd trust if for a podcast..So maybe take a look at the blue yeti..

[Link: bluemic.com]  It comes with a stand but I'd recommend a mic boom like this..It attaches to your desk and hangs over your monitor.

[Link: amazon.com]

[Link: amazon.com]


Then you're going to have to decide on the actual podcast software you'll use.