I've used MD in the past for broadcast work (community radio). I used a Sony MZR1 in a 'Reporter' housing which provided a decent battery and the ability to use XLR mics and 1/4" jack cans.
MD uses compression, so there's always a compromise in quality. Nevertheless, you can get decent recordings from the format. ALC would lose more quality - bringing up background noise when the music source is low and lopping the top off louder sections. Use manual where you can, setting the level to a tad below what you anticipate the max to be - get there early and do a test recording during the rehearsal. Make any gain adjustments VERY slowly and gently. You need to plug you mic into a mic socket, otherwise the input levels will be wrong. If you're taking a feed from the PA or a mixer, then you use the line input socket. Always wear cans to listen to what you're recording.
Good luck, and enjoy. Our station have laregly moved over to Marantz PMD 660's and Zoom's, but we still use MD somethimes.
Nigel
www.10radio.org