I haven't stepped into podcasting yet, but I've sone some audio recording/editing this year with Audacity which is a free download and fairly straightforward to use. You can also find more help with podcasts at the following sites: www.how-to-podcast-tutorial.com http://www.edtechlive.org/vpd/podcast101/
You may also want to check the "podcasting" tag on the right side of the Classroom 2.0 front page for more opinions/ideas.
Windows Movie Maker is probably the easiest to use. It is Free. It is part of Windows. Microsoft Photostory 3 is a free download. You can use it to make movies with narration and music out of pictures. It is also very easy to use.
Here are some of the resources I have found that help when working with audio and video on a pc. I have used all of these for doing one thing or another, whether it is converting video from one format to another, or creating dvd movies or just mp4 movies. Most are Free and many are open source, but the licensing on all of them should allow for use in schools. I have included some url's, for the others they can be googled. I think I have a few more that I have used for various tasks, so please let me know if you need anything else.
I would certainly suggest using the free, downloadable tool Audacity for recording and editing audio. You can also download LAME encoder to convert files to mp3 and then upload them to a site like Podomatic. I'm attaching a file for the very basic steps for doing this. Good luck.
Podcasting doesn't necessarily require an iPod or iTunes but if you are looking at getting content onto iPods, you'll definitely need iTunes to transfer to the iPod. But the biggest thing is getting your content (your video file) converted to the iPod format. A great website, and hopefully it'll stay free, is Zamzar. http://www.zamzar.com is a web-based converter that can take just about any kind of audio or video file format and convert it to another. It emails you when its done converting it with a link to download the new file. It works great and makes putting your MovieMaker or Premiere video files on your iPod easy. Hope this helps you and others.