My vote goes to Audacity.
It is freeware, crossplatform, works with many audio formats (import and export), also does not need ultra-high speed hardware.
Audacity supports all kind of drivers, even ASIO and it’s open source (means that you can modify it for your needs).
It comes with lots of plugins, and supports program language for making your owns effects.
Audacity supports VST effects too.
Most of the features of Audacity are designed for audio editing, thus the only one con I see is that you can’t use effects live, but only apply them on already recorded (dry) sound.
More you can read here:
http://audacity.sourceforge.net/