Well, we upgraded along the way.
When we started (Episodes 1 through 9), it was a cheap $9.99 microphone. Around Episode 10, we realized we wanted to take this serious and bought SHURE microphones, and built a DYI "Studio" in the garage to record in (for the rest of Season 1 and Season 2 - so Episodes 10 through 42). Then for Season 3, we recorded in my home office (which was pretty quiet) using the same SHURE mic set up. The audio software we use is GoldWave (and I am a stickler for trying to get the right sound). The only one I was never able to fully clean up because the original had so much noise was Episode 8.