1) Spend the most on the mic.
If you want to budget on the mic, check out the Rode NT1. I've used the NT1, and the NT4, and the NT1 is a much better sounding mic, IMO. Plus, the NT4 doesn't allow you to spread the capsules, like 2 seperate mics would, and takes up 2 channels.
Thanks for this recommendation. I liked the idea of one mic in stereo and already configured in x-y which I read is good for classical guitar. Are there other singe stero mics you can recommend that are better than the NT-4, comparable to the NT-1 or better?
There's this one, but you're going to be maxing your budget.... This is a pretty nice mic.
http://www.sweetwater.com/store/detail/LSD2/I guess I don't see the reason for getting 1 mic that is locked into one configuration- you can take any set of mics and put them in XY formation. But, as others have stated, the common way of recording a guitar is with one mic at the soundhole, and another at the 12th fret - that might not be in XY - or if it is, its coincidental, and not really capitalizing on the benefits of using an XY config.
To me, the NT4 seemed to lack the clarity/crispness other my other mics had... I think you might be able to get 2 NT1's for the price of an NT4... I'd just advise against the NT4 because you are buying something a lot less versatile. I was always surprised how well the rode NT1 did for my recordings.
So far I am thinking of a single stereo mic --> RNP Preamp --> 4 track digital recorder (either HD or flash). I am still not sure about that last link...I think the Tascam DP01 and Fostex MR-8 are 16 bit not 24. Will the difference between 16 and 24 be very noticeable assuming the other components (mic and preamp) are good/decent quality?
I noticed a difference on my digital 12 track when I went from 16 to 24. But, my opinion - 16 is more than good enough for most applications... its what (prolly) 75% of tapers here tape shows in... 24 is just becoming more accessible and portable to our hobby now.