In general tracking is while you're actively recording, and mixing is a post-recording activity.
For tracking in a small space, like most home studios, using speakers can be tricky because it tends to bleed back into the mic unless you are very careful.
That's why I think headphones work best for this part of the recording process.
Then during mixing (where you set relative levels, pan signals left or right, add effects, etc) it's better to hear it over the air.
Using headphones for this, while perfectly acceptable, may actually sound "too good" since the speakers are essentially right on top of your ears.
Regardless of which method you choose, each process requires you to hear what's going on and this is known as Monitoring.
Read on below and I'll talk about the 2 main pieces of gear required to get a good clean listen to the sounds of your new home recording studio.
This is a slam dunk for your home recording studio setup. Here's what I know for sure.
You will definitely use these, and you will definitely use these a lot.
The #1 goal for here is sound quality.
But you don't need to spend an arm and a leg because you can get a great pair for ~$100.
Also make sure it comes with a 1/8" -> 1/4" adapter.
All the headphone input jacks on Audio Interfaces use this larger connector size.
This is easy because anything in that price range will sound and work beautifully, as well as have the necessary 1/4" adapters.
The next criteria is a bit trickier to get right - Comfort.
Since you'll be wearing these for long periods of time, comfort needs to be an essential part of your search.
Make sure to try a few pairs on and make sure they don't pinch your head or literally rub you the wrong way.
Learn more at the Studio Headphones Page.
Basic Studio Builder Rating - $$
Don't get these from the bargain bin, but don't take out a loan either... and make sure they're comfortable. You'll use these on day 1 of your new studio so don't leave these off your list.
Quick Picks - Studio HeadphonesSony MDRV6 Studio Monitor Headphones
Studio monitors are just a fancy word for speakers... but they have one important difference from your home stereo system.
And that is that their purpose is to reproduce your music as it really is - or in other words without altering or coloring it.
You've probably noticed for yourself how songs sound differently when played on your iPod, from your car stereo, or from over a PA system at a bar.
The trick when mixing is to make it sound it's best regardless of the source... and to do this you need a reliable baseline to use when listening.
This is the reason studio monitors exist, to help you make smart decisions during the mixing phase of your projects.
You can check out the dedicated page here for the full story, but in general you'll want to search for Near-Field, Active Monitors.
All that means is that they're designed to sit close to you (less than 2 meters), and are powered independently (vs by an external amp, which I'm telling you is a true PAIN).
Unlike, the headphones shown above, I'd say this is not essential at first, but eventually you'll want to add these to your home setup.
Basic Studio Builder Rating - $
These can become mortgage payments in a hurry... so stay away from those. A solid set of monitors will allow you to accurately hear your songs so you can mix them properly.
Remember these aren't intended to sound "good" but rather to sound "unaffected". Leave these until later if money is tight and your budget is being squeezed.
Quick Picks - Studio MonitorsM-Audio BX5 D2 5" Active Studio Monitors