Once you get your head around how Audacity works, learn the shortcuts (ctrl-mousewheel to zoom, ctrl-click to start playing at a certain point, J/K to move to the start/end of the track, Shift-J/Shift-K to select from the cursor to the start/end of the track), find the audio tools (envelope, time-shift), get it connected to the right audio inputs and outputs, and are lucky enough to have a system on which it doesn't crash often, it's actually surprisingly good.

A couple of things to watch out for:

  • There's a nasty bug in 1.3.5b where a new project's sample rate is always set to 8kHz, even if it says it isn't - you have to change the rate to something else and back again for it to be set properly at 41.1kHz, otherwise you lose lots of audio quality on a recording.
  • Changing the input device always produces an error when you start recording, even if the device is actually working - you have to restart Audacity before starting recording.
  • If Audacity complains about not being able to record from a USB (webcam) microphone, try setting the sample rate to 16kHz and—importantly—mono. Experimenting with arecord settings on the command line is a good way to figure out what your microphone actually supports.
Audacity uses PortAudio for cross-platform compatibility, which means it can't use PulseAudio directly, but it's happy to connect to JACK for inputs and outputs. You can use this to record audio from Flash players, for example, or anything else which uses PulseAudio for output.