What cheap option is there to use a Mac to produce quality 'Videosongs'?

Question

Some of you must be familiar with Videosongs, like this:

http://www.youtube.com/watch?v=Uolz7V12evc

The idea is:

1. What you see is what you hear. (No lip-syncing for instruments or voice)
2. If you hear it, at some point you see it. (No hidden sounds)

I want to know how can I use my MacBook Pro to create videos like those. Which software do I need? Can I do it only using the pre-installed applications in my Mac? If no, then which cheap software do I need?

I'm just a enthusiast so I know very little about producing music videos in a Mac.

Edit 2011-05-27

The difficulty I see in this particular case is how to be able to merge multiple video/audio channels so they are all synchronized. Mixing the audio of course is something that must be done in a specific audio/track software but then I have to sync it back to several small videos and eventually repeat some of the videos. So my question is which software for Mac would be a better fit to accomplish that? Which one for audio and which for video? Can it be done only using GarageBand and iMovie?