There are so many factors that go into a good recording...perhaps this is not the philosophical response you were looking for but the pros and cons of md have already been covered.
I say go out and get what you can afford and start the taping experience as soon as possible instead of holding out for better gear. Like most others on the list, I have fallen down the slippery slope, and happily so. At the same time, I believe that all the good gear does is increase the likelihood of a good recording. And increase the likelihood of fucking it up too! More boxes, more cables, more buttons and knobs, more power sources - you guys know what I'm talking about here.
I still get a big kick out of lots of my md recordings. My Morning Jacket has played here twice in the last year and a half or so. First time - CSBs, Sharp MD, small club. Second time - mics/board, UA-5, laptop, JB3, post matrix (larger venue). Hate to say it but that first recording just flat out sounds better. Not because of the gear, but like I said before, gear just increases the likelihood of getting a good sound, it doesn't guarantee it! It also increases the role you play in choosing and setting it up properly, which again, can be a good thing or a bad thing.
Right now I'm thinking about putting the md back in action for stealthing. My CSBs just don't drive the JB3 high enough and I'm not ready to buy new mics just for the odd stealth (I still have the md deck for digital transfers).
And if the recent blind tests put on by Brian have taught us anything, it's that in reality, lots of people can't tell the difference between gear, or if they can, they often prefer the 'worse' one, choosing it for tonal characteristics vs. musical accuracy.
There's always so much said about preamps, a>d and compression when a newbie asks about getting into the game. It's probably quite daunting. This is making me crave a big test - JB3, M-1, MD showdown. True blind. We could just fire some quality studio music into the recorders so we can keep it controlled. Anyone interested?