The H4 is a nice little digital recorder and the built-in mics aren't bad. However it's designed for "field recording" rather than as a substitute for a recording studio, so if you want more control over the sound then it's a bit limited on its own. However it does score over much of the competition by also having full-size jack/XLR inputs for external mics.

No doubt others far more expert than I will comment, but my approach would be to use separate external mics for guitar and vocals connected to the mic inputs on the H4. Record these as separate tracks, and use Cubase Lite to mix them down to a stereo track. You'll have far more control over mic positioning and EQ for each track than if you try to use the built-in mics.

However, you'll need a pair of reasonable-quality mics, leads and a couple of stands so this isn't a cheap option.