I am in the same boat as you, being a gigging jazz musician. I've recording my gigs with a cheap stereo mic for years. About a year or so ago, I started hosting a weekly jazz jam and made a point to experiment with using external mics and recording to a mini disc. I really fell in love with 2 Shure SM-57's sitting right on the stage. One pointed at the bass, on right, one pointed at the guitar, on left. Drums in middle. I ran them into an Audio Buddy Preamp before going analog into the MD. The whole setup costs around $500. I am using the Edirol R-09 nowadays. Some people here may freak of the idea of someone selling a pressed disc that has been recorded on a stereo pair of 57's. For my money, when you have musicians that are very acoustically aware, have great dynamics and can switch gears on the drop of a hat, the music really benefits from not being manipulated after it's been captured. Find a good balance beforehand, get the mics in a neutral spot, and GO!
Alan