back to the point and shoot camera analogy... as Nikon now has the small Nikon 1 with changeable 'pancake' lenses, it makes me wonder if someone could create or mod some of these XY type SD recorders to instead of having fixed factory caps, have changeable caps from higher end manufacturers, say Neumann or even Nak caps could be attached to the top of these, keeping the super portability and easy setup, yet improving the sound quality dramatically. Probably not easily doable, but it would be pretty cool.
There is much more than just the caps. The electronics behind them (especially in the case of condensers) are critical as well.
By the way, Nagra follows an approach similar to what you suggest. They have a small hand-held recorder, the
http://www.nagraaudio.com/pro/index.php, Nagra SD, that accepts different microphone attachments. And I guess it wouldn't be that hard to design third party microphone modules.
This discussion reminds me of similar ones related to photography where people argue that a $200 point and shoot can perform the same as a full SLR with different lenses, etc. Obviously in some situations the point and shoot will perform well enough for the majority of people who want it (snapshots, etc). Telephoto, zoom and macro photography is better served by a full SLR.
I think with audio, if you haven't heard anything other than an internal mic recording you will think it sounds great, but if you hear a great recording with great equipment it blows the internals away. That being said, I am not totally down on the internal mic recordings in some situations. I have heard some great recordings done with them, and I have also heard some horrible recordings with some very nice rigs.
Regarding the "quality" of equipment there are two different variables you need to consider. One is, of course, actual quality. For a photo camera it's the optical quality of the lenses, reliability of the shutter and other mechanisms, the sensor in the case of a digital camera...
The other important attribute is flexibility. A reflex camera (or one of the so-called EVILs) certainly gives you the flexibility of using many different lenses and other accesories impractical with more compact cameras.
That said, depending on the situation, a compact camera with great lenses (my beloved Minox 35 comes to mind) can give you amazing results in the right situation, provided you know how to work out its limitations and apply its strengths in your favor.
The same happens with recording gear. In my case, for example, my main photo camera now is a Lumix LX2. Small enough to fit in a large pocket, it has excellent optics, and I don't feel like I'm losing much compared to a reflex. I've shot all kind of difficult photos with it in low light, without flash, and the thing works. Regarding audio, well, I know I can carry just the PMD661 and some mikes, or, in case I want outstanding preamps, carry the ULN-2 and hook it with S/PDIF.
So, know your tools and experiment a lot
Sometimes you can be blown away by the results you can achieve!