Sorry for the late reply.
~$200?
You could go for a Line 6 Pod 2.0 or a Behringer V-Amp 2. Or even better (IMO), a Tech 21 Sansamp GT2 or Classic.
The Pod and the V-Amp are both digital modelling processors. They take the signal from your guitar, convert it into a digital signal, and then apply a DSP algorithm to make your guitar sound like it's playing through a Mesa Boogie Dual Rectifier or a Fender Twin Reverb, for example. You can even apply effects like delay, reverb, chorus, flange, etc. Some people hate digital guitar processors, others love them. Hunt down some sound samples, and try these units out.
The Pod 2.0 (I think they have a revision out to 2.3 now) is a standard in studios everywhere. I'd recommend it over the V-Amp, and it also costs less than the more recent Pod XT (which is $300 US). I've heard some pretty good tones come out of the old Pod, and some pretty bad ones. Try one out and decide for yourself.
The Sansamp products, on the other hand, are analog amplifier modellers. There is no signal conversion (and no corresponding signal degradation), and the work is done by transistors, just like in a solid-state guitar amplifier. These products don't offer any effects like the digital ones do, but if you're recording to the computer, your recording software probably has plugins for these kind of effects.
Check out the Sansamp products at [url]www.tech21nyc.com.[/url] They all have plenty of MP3 demos.
Using one of the digital modellers, you can just use a 1/4" to 1/8" adapter to plug it into the line-in on your computer. However, using a Sansamp, you'd need to buy a DI box ($20-30) for the impedance matching, as I said before.
I have a Vox Tonelab (a hybrid tube/digital processor) and a SansAmp TRI-A.C., and I prefer the Tonelab for clean sounds, and the TRI-A.C. for anything moderately heavy. YMMV.
In conclusion: if you play heavy music and have decent recording software with good effects - go Sansamp. Anything else, check out the Pod 2.0 and the V-Amp 2.