High-End Professional Sound cards are going to be $1500 and up (BIG dent in your budget, Sonic Foundry make a lot of good ones).
You’ll want the right capturing software as well, I like Nuendo or Pro Tools.
A low-end or consumer card like Soundblasters are good enough. Then use a consumer level app like Cool Edit.
What do you want to do? Capture for CDA replication or just mp3s? MPEG Compression is going to degrade the quality (high and low ends) anyway so shouldn’t be a differnce.
Why don’t you just ask your friend who currupted this disc if he could give you a good copy? What is he trying to protect some local band anyway? The only reason Record Companies (not artists) do it is theft…but I don’t think anyone is going to steal some local no-name bands music. In fact they should want it to get out.