I've been through plenty of set ups of both the Mic and Pick-up kind over the years but have settled comfortably on a pick-up but WITH an outboard pre-amp which has been specifically designed for acoustic instruments and lets me work through all the EQ ruffles that my particular guitar is prone to when its plugged in. Having total control over that EQ is essential as every venue is different and will make your sound different too.

But it is certainly sound advice that you have to pay good money for good equipment. I did and now get more compliments about my sound than I used to. And after all, what your audience thinks does count.