Specific sound effects creation/editing software does exist (SFX Engine) but like artwork it's good to have source recordings to work with. Processing effects using sample editing software is always a bit rubbish, those programs were really designed as editors in the cut and paste sense and not 'creative' programs. A music synthesizer is often better.

Mark
Ever wanted to command a starship?
http://www.lostinflatspace.com

hi.

To create sounds from scratch you need to know a thing or two about sound synthesis. It isn't terribly hard once you get the hang of it. For instance, the classic laser sound is just a saw wave with quick downward filter movement.

There are many free software-synthesizers (softsynths) out there but most take the form of a "VST" for which you'll need a "vst host" for. Unfortunately I don't do any of my music or sounds on computer (I use hardware because.... ugh.. whatever, don't want to start one of those software-vs-hardware arguments again! :)) but I hear "Cool Edit" will have all you need to quickly make sounds on the cheap. You can of course also import ("sample") sounds for editing. I'm sure if you do a search there'll be a demo of it floating around.

-j
ps: i STRONGLY advise against the suggestion of buying a guitar+effects box because it is extremely limiting compared to what you can buy with the same money (mainly a real synthesizer).

sorry, i should have mentioned this piece of software first:

http://www.lysator.liu.se/~zap/stomper/whatisit.html

it's free and mainly used for drums but you can get a whole bunch of sounds from it. like, for explosions all you really need is noise and probably some filter movement.

quick hi-hat sounds are also good for bullet-hit sounds etc. also, you can always layer a bass kick behind another sound to give more oomph (a bigger gunshot, a heavier explosion, etc.).

and it's free! oh wait.. i just remebered:

"goldwave" is another good (free) sound editing software.

-j

Additive synthesis, anyone?

I'm not sure about the details, but the basic idea is that you can create any kind of sound using some basic waveforms, such as tri, square, saw. Older arcade games never had any really realistic soundeffects due to the fact that back then the soundchips had only a few sound channels, usually dedicated to producing single type of waveforms. They usually also allowed you to use some basic tools, such as filtering and pitch bending.

IMO, pitch bending is the key element to creating those old-skool arcade sounds. For example, try bending a single squarewave from C5 to C4. Sounds familiar, huh? Anyway, as cheesy as it may sound, experimentation is the key. Experience in music making might be helpful, but you should bear in mind that sound effect creation is a whole different form of art.

Arcade beeps and bleeps? Use a SID Emulator morons! libsidplay?