http://forum.thegamecreators.com/?m=forum_view&t=47787&b=2 I belive that covers most everything... I use ModTracker myself, it's free and has a easy interface. Fallout uses Skale Tracker, it's also free and is based off of FT2. For kick-arse vst support you might try Psycle Tracker...
Er people have said that Fruty Loops is really good, but I don't like it
It focuses too much on loop based creation, which of course for games is alright, but I guess I just like trackers too much.
Sound editing: if you don't want to spend money on CoolEdit, then check Audcity. The easiest thing I've ever used, didn't even have to look at the manual to do my own sampling
Very user friendly.
edit: forgot to mention, the demo of fruty loops is VERY friendly--it lets you do anything except for save to the fl format (tho I'm pretty sure it doesn't let you import vst plugins)