Tim, I use 2 small-diaphragm condensor mics (not expensive ones - AKG Perception 150's, cost about 80 quid each, I think). I put one pointing at the 14th fret and one pointing just below the sound-hole, both about a foot away. I record onto 2 tracks and thus have full control over balance, EQ and panning of the sound from each mic.

If necessary the two tracks can then be mixed and bounced into one stereo track (for instance if you have eight tracks available but need to use more than eight).

I record onto a Tascam DP-02FX portastudio and the results are pretty good.