Yo RNB! You have really asked 3 questions. The first one is the difference between a dynamic mic and a condenser mic. The second is, what is the difference between a cheap mic and an expensive one. The third is what is the difference between a good mic and a bad one.
First, dynamic and condenser mics use 2 different ways to translate an acoustic input into an electronic signal. Check Harvey's sticky thread to get, as you say, into that matrix. In general, condenser mics are more sensitive, and produce a stronger or "hotter" signal, They also require external or battery power to operate, usually called "Phantom" power. Note that sensitivity can be good or bad, depending on whether it's picking up the nuances of a great acoustic, or the bowel sounds of the guy playing it. Condenser mics are not better than dynamics, they are different, like a hacksaw is different from a hammer.
Second- expensive mics are, as a rule, made using higher quality components, and often involve assembly and design crew that have well trained ears. Quality control will be better, as a rule. Well, what is the difference between a Mercedes-Benz and a Hyundai? Note that on any given Monday, the Mercedes may blow a tranny, and the Hyundai may get you to work. Also when it's wrecked or stolen, it will cost less to replace it. You might even be able to afford 2.
Thirdly- Good mics do one of two things- They either make a source sound the way it really sounds, or they make it sound *better* than it really sounds. Some mics we call *accurate* or *transparent*. Others we call *colored* or *flattering*. Mics can be like makeup. Sometimes you don't want to hear the truth, you want a pleasing illusion. Bad mics make things sound unlike the truth, either by distorting the sound in translation, altering the frequency profile of the source, boosting or attenuating frequencies, or adding self-noise, sound that is made by the mic, rather than the source. This is where that "flattering" stuff becomes a matter of opinion. One man's "high end detail" is another man's "harsh, hyped, high end". One man's "flattering color" is another man's "muddy". I'm sorry that there really isn't an objective way to measure "sounds good" except with the human ear, which is connected to an invariably imperfect brain. It's that simple. Good mics make things sound good, and expensive mics make more things sound good more often than cheap mics, but not always. Some things just call for a cheap dynamic mic, and that Radio Shack mic might surprise you when pointed at the right snare drum.-Richie
