OK Bryan, this will be complicated, but I'll do my best.
The first thing you'll need is a Y-cable with two stereo out jacks and a stereo miniphone jack (you know it as a headphone jack). Next, find a tape player with stereo out jacks, and bring it near your computer (or, preferably, an MP3 jukebox with recording capabilities. I have an iRiver IHP-120, check it out at
www.iriveramerica.com). Then plug the miniphone jack into the mic hole in the back of your computer (or the MP3 player).
Next you'll need a recording program. I recommend Cakewalk Pyro 2003 (I think their site is
www.cakewalk.com). Open up the recording panel and make a new file. Choose your file format, and press the record button in the program. Then push play on your tape player. You should see an audio wave begin to take shape in your recording window. On terms of what to record, I would do an entire tape side at once, and edit it (with Pyro again) later. When the side ends, save the file. Then go into the "Record & edit audio" window, and insert split marks whenever tracks end. Save the file pieces, and you're done!