the computer generally is where you sequence (cubase, logic, pro tools) MIDI and audio, and control all the external devices you have in the studio. Devices are generally at minimum a synthesizer and a sampler. A master keyboard is here to control the sequencer (which echoes controls to the device you have selected). There is a mixer to route all your audio signals together and tweak them, add effects to them. The effects are plugged to the mixer, and are racks (generally one for reverb, one for chorus, one for compression at least). Finally, a DAT recorder is handy to "tape your sessions" quickly and with a good sound.

hope this helps. I am thinking about writing a whole article on "setting your home studio" or something like this... actually several of them, from low budget to high budget, and how to connect everything together. would be a good idea.

For now (until articles are published), i hope this post helps you out. You should also read previous threads, it also helps a lot.

take care and good luck!