Personally I like to record as much "live off the floor" as possible, I agree that the energy is usually far better than recording it piece by piece. I have a mobile setup (pro-sumer level, the gear is good but I mostly record hobby musicians). I find that the mobile setup allows me to work much more cheaply because I don't need to invest a great deal of money in a room that will be perfect for whatever I want to record in it. There are plenty of live rooms around that sound great without any special engineering having been done. I'm sure many of the musicians here have experience that feeling of playing in a room and just loving the way you sound in it. Studios certainly have their uses, but I will echo the thoughts of many on this thread and say that the skill of the engineer far outweighs both the gear and the environment.

P.S. when I mentioned the difficulties of recording myself I was referring to adjusting the pre-amps. I hate playing through a great take of a song and then finding that half the track is clipped because I started playing louder halfway through.