Ed is right about using the best equipment and a professional engineer. That IS the best way to go... IF (and that's a big "if") you have the money, the talent, and the ability to promote your material nationally and internationally.
As for the rest of us, we are "do-it-yourselfers".
I don't have one fourth of the equipment Ed has, but I make some pretty damned good digital recordings despite the handicap.
The most important thing to me is the music itself. It has to be my best possible effort of writing, arranging, playing, and recording.
It might have sounded better if Ed recorded and produced it, but doing 25 re-takes for each recorded track would have costed me a small fortune on "his" time. I like recording on MY time.
Hell, most of my CD was recorded in my sweats and fuzzy slippers. That's the way I like it... slow, easy, and a familiar, comfortable atmosphere.
As for newer equipment being the "best", I don't really think that's totally true.
I've got several CD's that were originally recorded on tape that have killer sound quality. (Supertramp - Crime of the Century, originally released in 1974, is one good example)
Sometimes, this new equipment makes songs sound overproduced and too processed to be enjoyable. I'll take an old Supremes record over a new Brittney Spears CD any day of the week.
The most important thing here is the music.
Limp Bizkit and Kid Rock recorded with the "big boys", but they still sound like shit. There's no substitute for GOOD music, no matter what the recording quality is like.