The Flextone IIXL does not have the capability of outputting digital audio via any sort of digital connection. The audio outs on these older amps are strictly analog. You'd still need some sort of 3rd party digital audio interface to get the audio signal digitally into your computer system.
As far as recording software goes, there are a lot of different programs in 2011 you can choose from. Some of the most popular titles would be: ProTools, Logic, Reason 6, Live, Digital Performer, Cubase, SONAR, Nuendo, REAPER among others.