Well, almost, Dracon. DI, or direct insertion, usually involves running an instrument with a pickup (could be guitar, piano, sax, bass, almost anything) into a box that changes the high impedence of the pickup (high-z) to line level, so you *can* plug it into the line in on a soundcard, recorder, etc. Some preamps, mixers, soundcards, etc. have high-z inputs already, which basically means they have an onboard DI box. Like amps, DI boxes come in different levels of quality, and do different things to the sound of any given instrument. There are both active and passive versions, powered and unpowered.
In the last few years, amplifier modeling technology has started to use digital approximations of wave forms of real sound coming from real amps, and tries to copy the sound of the real amp, with varying success. A modeler, such as Line 6 POD or Behringer VAMP, are also DI boxes of a sort, as they take High-Z and put out line level, This technology is in early development. It used to suck invariably. Now it sucks somewhat, some of the time. I'm convinced someday it won't suck at all.
As far as DI, it's a standard for bass, where it just works pretty well. Often engineers will mike up a guitarist's or bassist's amp, but take an unprocessed line off to another track just for a backup. If you need a different sound later, you can reamp it as Littldog suggests. Gee, I wonder what that would sound like through that old Ampeg? Then you can mic up the amp in a good room at your leisure, or run it through a modeler or whatever.
What you hear makes you play a certain way. The guitarist gets to hear his sound through his amp. Very few players are good enough to rock while listening to a dry, unprocessed track in their headphones.-Richie