Audio on the iMac (Teach me some cool Garage Band tricks)?

Ok, so I finally have a chance to play around with Garage Band and really like the wide range of amp emulation and effects peddle emulation available. However, I seem to be having problems with the audio input source.

If I plug a patch cable directly into the 1/8” jack in the back of the imac I get decent input from my guitar. However, (even though it is a mono track) most of it seems to come out in the left channel according to the VU meters. I have even tried with both 2 conductor and 3 conductor cables with a ¼” to 1/8” (mono) adaptor with the same results. Is there a setting I can tweak somewhere? (Note, I am talking about the balance of the input source, not the balance of output in the mix)

The mic is a whole other adventure. I have a low impedance mic with a low to high impedance converter I plug that into the 1/8” input (via a ¼” to 1/8” converter and patch cable) in the back of the imac but even when I crank the input gain I can only get enough signal to barely register on the VUs. Once again, is there a setting I can tweak somewhere.

My gut feeling is that I need to abandon the build in input jack and go to some sort of USB audio input source. Any recommendations for good yet inexpensive dongles to solve my input problems.

Lastly, any opinions or advice on Audacity vs. Garage band. Garage band has the great amp emulators. But audacity seems to be a bit more flexible overall. Opinions?