Start CoolEdit and create a new file. In the dialogue box choose a sample rate of 44100, stereo channels and 16 bit resolution. This is the resolution of the file that will be recorded onto the CD. You may choose higher rates, but for now it is just as well to stick with these settings and experiment later.
You will need to have an idea of the volume of the recording you are going to make. From the 'Options' Menu on CoolEdit, choose 'Monitor VU Level'.
The next step is to make sure that the sound going into the card is actually going to be recorded. Open the sound card volume control panel. Make sure that the 'Line In' is selected to record from (you may have to change from 'playback' to 'record' in the options section. Check your soundcard documentation).
Then play a track from the LP you want to record. Watch CoolEdit's VU meters at the bottom of the program.
Adjust the volume slider in the volume control panel. You want to make the highest level of the signal reach above -9 or so without making the little peak windows to the right of the 0 light up. If the signal goes above 0 then it can cause digital distortion. The odd peak into the red may not be noticeable, especially if it only happens during the needle set down or with large pops from scratches. It may take some time to get the level sorted out, but once it is done for one LP, it should not need too much adjustment for others. 45s and singles are recorded louder that LPs and inexpensive compilation LPs are often recorded quieter (because they have to record at a lower level toget so many tracks onto an LP. This is part of the reason why they rarely sound that good).
Once you are happy with the level then cue the record and press the CoolEdit record button. Gently lower the stylus onto the record and enjoy the LP while it is recorded onto the PC hard drive.
When the LP (or track you want) is finished, simply stop the recording and lift the needle from the record (if applicable). Save the file onto the hard disk in wave format by giving it a name and location. I keep a directory on my hard disk called 'Audio Files' and name files according to the album title and side. For example 'dark side of the moon 1.wav'.
Now you have the file on the disk you can start to manipulate it.