breathing noise? i guess nobody breathes THAT loud. except people with severe lung problems or... i don't know. i've recorded folk guitar with this technique, and i didn't experience any problems with that. as for a nylon-stringed, i haven't tried the same setup. i usually go for a large condenser in front of the 12th fret. i guess on soft passages maybe you could experience some sort of noise not only from breathing but from other extraneous noises. i'll try it out. however, a cardioid pattern would help avoid that problem, especially if you place the mic a little lower than your mouth/nose, at about shoulder, not ear, level.