GarageBand - Lexicon Lambda

Trying to record vocals and acoustic guitar into a mic through the Lexicon Lambda into GarageBand. The recording has a hiss/white noise that makes it sound like it was recorded through an old cassette recorder. It isn't background noise as the room is quiet. I've tried adjusting the EQ settings and it helps somewhat, but is not a total fix.
At this point I'm only using one track or input rather than trying to record multiple sources so its just one mic providing input. All other volume controls for the other sources (Mic2, Line 2, etc) are turned to minimum. The Lambda is hooked up to a USB port.
The mic is a NADY. Yes, a cheap mic but I've read reviews on other web sites that these are fine for basic recording. I created a new track to record just using the internal mic on the Mac as a test and it sounded pretty much identical with a good deal of white noise. It seems like there would have to be improvement using the additional equipment.
I tried recording an electric guitar plugged directly into the Lambda and also got poor sound quality with white noise. Since there was no ambient noise to record through a mic, it seems to be internal with Garageband or with the mixer.
The GB track is a basic track, real instrument, no effects.
Any help is appreciated! Cheers!