Yo Fesp! Yes, you need a preamp, but preamps come in several forms. Mixers have preamps in them, ranging from Behringer MX series (trash) to Neve consoles (to die for). Some high end sound cards have preamps, which vary in quality, usually not great ones.
Digital computer interfaces may have preamps, which vary in quality from cruddy to pretty good. Amp modelers, such as POD, and DI boxes for instruments are specialized preamps intended more for instruments than microphones. If you don't have any preamp, you need to get one as a minimum requirement for recording. If you already have a cheap preamp, adding a slightly more expensive preamp probably won't improve your sound much.
Here's the lowdown. Preamps are one area where money makes a huge difference, and like car racing, 80% of the money is spent on the last 20% of performance. So you can get a cheap preamp that will do 80% of what the high end units will do, but if you want the other 20%, be prepared to pay for it. Big time.
All preamps change the sound that passes through them, some more than others. There are solid state versions, with and without transformers, there are tube based models, and there are hybrid designs, incorporating a small tube in the front end of an otherwise solid state design. Most inexpensive preamps that claim to be "tube" preamps are really hybrid designs. The real tube pres tend to be pricey. Do not be sucked into the tube vs. solid state thing. Some of the greatest pres in the world have tubes, and some of them don't.
Some preamps add more selective distortion than others, often called "color" or "warmth". What it really is, is distortion, which can be good or bad on any given signal. It's like airbrushing a picture. It can be flattering, but at the cost of losing some detail.
Preamps can have one or two channels, or up to 8. Mixers can have many more. Usually a good project studio will start with 2 relatively clean channels, 2 more colored ones, and a mixer for a bunch of channels, which usually means you are recording drums.
I happen to like them in pairs, because they are helpful for stereo recordings, where matched pairs of mics are used, usually through matched preamps. I believe any channel worth buying is worth buying two of.
So, what is the best preamp? The best one you can afford. Here are some favorites of mine, from cheap to ridiculous. Most of these I have used, but a couple, I'll admit, like Sytek and Great River models, make the list because people I trust use them and love them. Note that these are opinions, because what sounds good is an opinion. Most people would agree that a $3000 Taylor sounds better than a $100 Silvertone, but a Martin, Gibson, Larrivee? Generally if you buy a top of the line model, it can only suck so much, but it may not be what *you* are looking for. Note that some preamps include EQ and compression, and these pres are usually called "channel strips". Anyway, here are a few favorites:
Dirt cheap (under $100) Audiobuddy and (gasp) Behringer Ultragain seem to rule the roost. I am unimpressed by Rolls and ART models.
Under $200- it opens up a little here, and M Audio DMP-3 and Studio Projects VTB-1 are favorites. The DMP-3 is being discontinued, unfortunately, but you might consider the M Audio Duo, which is built to only work with a computer.
$500 and under- FMR Audio RNP, Grace Design 101, and DBX 386 are among my favorites in this price range.
$1000 and under- This is where the fighting over what's best really heats up. Joemeek twinQ, Sytek
MPX-4A, Toft ATC-2 come to mind, and I'll include the Great River ME 1-NV, which is just over $1000.
Over $1000- By the time you get there, you can draw your own conclusions, but any of these pres are likely to sound real, real good. Industry standards include Avalon, D.W. Fearn, Manley, Great River, Pendulum, API, Crane Song, Earthworks, Brent Averill/Neve.
There are countless others, and if I missed somebody's favorite, sorry. These are just my favorites.
Currently, I use M Audio DMP-3, DBX386, Joemeek twinQcs, and Avalon AD2022, so my pres range from $119 to over $2000, and I find uses for all of them. Sorry about the long post, y'all, but I hope I covered the basics.-Richie