riznich said:
from what i hear the small mixers do just fine.
I've used a bunch of these, and also have one myself (SoundCraft). In fact, I use at least one of several different smaller mixers every week for PA, and can compare them to both larger mixers (Allan and Heath, e.g.) and to dedicated preamps.
Compared to e.g. a DMP-3 (which is in the same price range) or maybe a Rane MS-1B, they are 1) much more noisy and offer less clean gain, 2) they tend to easily distort because of lacking headroom, or 3) sometimes make the sound "crack up" if you're not very careful about getting the right working levels with input gain vs. fader leves 4) the EQ's are often next to unusable because they have too much regulation gain and introduces different kinds of easily discernable distortion and phase noise, 5) the faders and pots tend to start being noisy after a couple of years of use, and 6) they don't last a long time when used heavily (connectors break and start cracking, ...).
Other than that, they're fine
In my setting, I also see several less experienced people try to run the PA. It is often quite difficult for them to get a good sound out of such a system, because of the problems mentioned above. If you know how to work it, you can get reasonable results -- but as a learning tool, I'm not so sure...
Why you would want to invest 50-75 USD in a crappy mixer instead of spending just a _little_ more and get a nicer preamp is a bit beyond me -- unless you really need the functionality of a mixer. And the better mixers are as "expensive" as some of the preamps, so there is no real saving here.
I know it can sound a bit harsh, but really -- I personally didn't learn how to work the EQs before I got upgraded to better equipment and learned how things were actually supposed to work. But that may of course just be me.
Said by someone who started out with a mixer

Didn't know better, and needed it for other purposes also (live use).
and by picking up 6 inches away i guess i should have made myself more clear...it picks up best from up to that far away. if the phone rings from the other end of your house it wont ruin your recordings the way a condenser might.
Mainly because of the more narrow pickup pattern. If the mics are pointed in the same direction of the phone and set to the same levels, you will hear the phone equally well in both mics -- unless the preamp/mixer has a higher noise level for the SM57 because of the lack of clean gain, so the phone drowns in the noise floor
the thing that drew me away from tube pre amps from what i read, is they tend to add even more 'warmth' , or 'colouring' to your natural voice.
Yes -- better start out with clean equipment (DMP3). Although the VTB1 can also sound reasonably clean. But most (if not all) cheaper "toob" equipment has this problem you mention.
Still just trying to help.
Peace,
-- Per.