We have Kim Killspeed in the studio this evening recording some guitar parts for their next EP. Kim Killspeed are a local Sydney band who recorded and mixed their first EP here at Everland too. Andy, from the band is a bit of a guitar obsessive and has some nice Tele's that we often use. He also collects amps and has an original Fender Champ from the 50's. These amps are super-basic with just a volume control and a tone knob. They record really well, and they are only 5W!
When recording guitars I'll often use a two microphone setup, pairing a dynamic (such as a Shure SM57) with a condenser (like an AKG C414). You have to be careful to get the phase relationship between the two microphones correct but a blend can often give a fuller sound than recording with one microphone on it's own.