I read all the above threads and since I do about 45 sound jobs a year (mostly medium folk/acoustic concerts), I thought I'd toss in my two cents worth. Most of the advice on the SM 57 is pretty good, but I've gone to the Beta 57's which can easily double up as a vocal mic without the excessive bass proximity that a 58 generates (also the pattern is tighter, which makes a difference on a monitored stage as opposed to recording). If you're only recording, you might want to try an omni-patterned mic, which will give you a much better "natural" sound than any cardiod ( which attenuate from the rear).
A good condenser is the Audio Technica MB 4000 which can be shopped at about the same cost as a 57 (a Beta can be shopped for thirty dollars more than regular 57, e.i. You have to know someone - get a friend who regularly buys sound gear to get it for you on his discount).
If you can get two matched mics try a Y pattern placement. Put the mics (either on two stands or a double head stand) into a horizotal V configuration with the ends and cables of the mics headed out-board at a 45% angle and the heads closing to within one inch. Place this arrangement 6 inches out from where the neck meets the guitar body. I use this a lot on classical guitars or flamenco, and it sounds great. You can use this on stage, but watch the mic aimed towards the sound hole "(bleed off BOTH bass and treble and bump 800 hz). Lane, What I'm reading into your statement is that you already HAVE the Thinline, so go ahead and put it in, providing you don't get raped in installation costs (remember your guitar warranty may limit your choices and installation). If properly installed, it does no harm until its used and it can provide a back-up to a warmer mic'd application by using two available channels. Also, even if it sounds a little too "electric", it's better than playing "air guitar to the folks in the third row" (if you're fronting for Suzi Rottencrotch and all the "best" channels are taken). Preamps are important too, though, with the exception of the Platinum, most of Fishman stuff is, in my opinion, just not that good, and vastly overpriced. Dispite their rock 'n roll reputation, Boss puts out a damn good seven band EQ with +/-15 db level at $90 'merican, if you're going 1/4 inch to the amp. If not, couple the Boss to an Berhinger DI ($60.) and go XLR to the mixer, (the DI is active and phantomed, with two really good 20 db pads ).
If you go condenser, use an ART MP tube preamp ($100.) which will send phantom power to the condenser, and smooth the even-order harmonics, and your still $70 shy of a Fishman, (but you'll EQ at the mixer). Another excellent (but non-tube) preamp is the LR Baggs Para-acoustic DI ($150.) with 5 band EQ (two of those swept-parametric), with an effects loop (real handy for a wee touch o'chorus).
NOW Guess what? I realize that there are very few people who understood the above techie-talk, so print out the above statements and find a good sound man, who is not a rock 'n roller, to explain them to you. I basically agree with most of whats been said above, with some prejudices against over-advertised and under-engineered gear. If you don't hook into someone who has the time and expertise to explain and let you try out various combinations of mics, pick-ups and pre-amps, then just fill up your your pockets with cash and back the truck up...cause, for a few bucks more, there's always a better sound out there .