I tend to avoid all-in-one solutions (like a digital microphone). All the pieces of the system are still there, just in one box. Marketed with emphasis on the simplicity and convenience rather than quality and no options for incremental improvements and limited compatibility with next generation equipment. USB is fine today, but will you have it on your computer 5 years from now? What is the weakest link in that system? The microphone, the mic preamp, or the analog-to-digital converter?

For what you are recording, I would get a budget, large diaphragm condensor mic, a mic stand, a small mixer or preamp, and the necessary cables. Your Dolby compressor could work into this system nicely too. From these things go into the LINE input on your sound card. My first choice for a budget condensor mic is the Russian-made Oktava MK319 available on eBAY and at Guitar Center stores. There are others out there by Marshall (MXL), Behringer, Samson, Nady, and others. The Behringer B-1 would be another good option for you.

For a mic preamp I would probably consider a small Behringer mixer - here's a model with two mic inputs for $50 (room to expand in the future!).
Behringer UB802
The output of the mixer can feed your Dolby compressor to help with the dynamic range issues you expressed and from the compressor go into your sound card LINE input. I think the only cable you'll likely need to buy would be 1 mic cable and maybe some RCA patch cables to go from the mixer to compressor - compressor to line in.

This isn't as convenient as plugging a "digital" mic into your USB port, but for under $200 you'll have a real mic on a real mic stand and with some experimenting on mic placement I can assure you that your socks will be knocked off by what you are able to record and broadcast on PalTalk.

karl
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