andyouandi,
This is something that I've been doing for quite a while. Depending on what you're going for, it really matters very little how it gets captured, as long as it's captured. At least for what I was looking for, anyway.
At first, I would just set 1 SM 58 up on a stand, and do a few tests to see where it would capture everything the best. The quality was not superb. But, again, the question is "What are you going for?" I cataloged every practice that we had, burned a disk and passed out the disks to the band members afterward.
I even keep a diary of the tracks that I record for the session, as well. That way, I've got something to reference while we go over the material. I make notes of the settings for the instruments, what equipment was used, where we recorded, etc. I wrote down parts that I liked, parts that I didn't. It's proven to be a great tool.
The big test was finding band members that will put as much into studying the material as much as I did.
Getting off track a bit, sorry.
I started upgrading my recording set up, and bought a Studio Projects B1 for vocals. I started using this mic for recording the room, while pointing the 57 a bit closer to the vocals. Just a really basic sounding mix. Eventually, I upgraded again, and have a 57 on guitar, a 58 on the bass, another 57 on vocals, and the b1 in front of the drums. It takes a bit longer to set up, but since I like the experimentation, and don't mind getting there a bit early, it's ok with me.
At any rate, do what works the best for your goals. These types of recordings are almost solely for songwriting/arranging purposes, because the quality of sound is just not good enough to try to evaluate an amp setting, etc. So, if you can capture the chord changes, or a drum fill, or certain riff or melody, or whatever, then you're already doing great. Save the money for other things that the band needs to have before it needs the microphones. Unless, of course, the band is ready for it, or you want it for your recording setup yourself.
-Speedy
