Preamps
Most devices (recorders, compressors, EQs, etc.) expect to receive a line-level signal. Microphones put out a much lower level signal. The signal that the microphone puts out must be amplified to line level. That's what a microphone pre-amp does.
Many types of equipment which, in typical use, will have microphones plugged into them come with microphone preamps built in. Mixers (recording or PA) usually have a mic preamp for every channel. Old reel-to-reel tape decks usually had two microphone preamps in them. A lot of portable recorders (reel-to-reel, cassette, minidisk, DAT) have one or two mic preamps in them. Some soundcards have mic preamps. Multi-track recorders, on the other hand often do not have mic preamps built in, on the assumption that you're using a recording console.
For most of the history of microphones and recording, people used whatever mic preamps were built into the bigger machine they were using. Hobbyists recording things around the house used the modest-quality microphone preamps built into their tape decks. Fancy recording studios used the higher-quality mic preamps built into their recording consoles.
More recently, recording studios started using "outboard" mic preamps -- i.e. separately-boxed preamps bought on their own, rather than as part of something else. I can't say I know why this started. Some say it happened when recording consoles stopped being custom-built and became standard mass-produced items equipped with crappy mic preamps ("crappy" here being a technical term meaning whatever the person saying it thinks it means). Or it may have to do with the rising worship of all things "vintage."
Anyway, it has trickled down to the home recordist, and now, just as the owner of a $15,000 console needs to have a $5,000 outboard mic preamp, the owner of a $450 console needs to have a $150 outboard mic preamp.
[Just to avoid misunderstanding: the last paragraph should be read in a mildly ironic, but not sarcastic, tone]
