I agree on all points, Mooh. The acoustic sound is the best, but since we live in a powered society, we need the electronics for a lot of what we do. I play out about once a week, and can only do that with amplification. Since I have a band playing with me, and we sonetimes bring things up to pretty serious volume levels, the "stand in front of a microphone" approach doesn't tend to work well for me. I need an on-board pickup system of some type.

It's also worth noting that the guitar (this started as a mandolin thread, but a drift in this direction is okay with me) is a pretty quiet instrument compared to some others, particularly if you're fingerpicking or doing single-string leads. Depending on the makeup of the ensemble you're playing with, you may need some subtle amplification just to be heard, even if you're collectively playing at low volume levels.

I agree with you absolutely about the shortcomings of under-saddle piezoelectric pickups -- I can work the EQ all day to minimize the harshness, but when all is said and done I just don't like the sound. Again, the best reasonably-priced rig I've come across so far is the Rare Earth Blend (with the internal condenser mike) through an active DI of some kind -- currently I use the SansAmp Acoustic DI. I play some nice instruments, and prefer to do minimal alterations on them, so I don't like the onboard controls that you have to install by cutting a hole in the side of your guitar. And I agree with you that a lot of them don't have the sensitivity or subtlety that I'm looking for anyway. As I said above, my arrangement isn't perfect, but it gives me a reasonably authentic tone, good feedback resistance, and flexibility, all without breaking the bank.