I agree that the external pickups are pretty much rubbish. However, I do like internal pickups, and if you pay for a decent active one like an LR Baggs Element or Fishman Matrix, it will sound pretty good. However, if you want to go with the microphone route, the standard seems to be the Shure SM57, and it is a good mic, and goes for about $100. I've got two of them that I bought used, and they were in terrible shape (metal case was literally split in half and shattered and was held together by electric tape), but the mic still worked great, a testement to Shure reliability. But thee are also a lot of other condensor mics out there that are good for recording. I haven't tried any of them personally, but I'm sure someone else here has.