Hey Toe Knee,
A couple of suggestions.
1. Get a nice mic preamp. The preamps on the Fostex are lacking. They're sufficient, but that is about it. I use a mackie mixer and insert that (from the insert on the mackie) to the front input. this works very well.
2. Get a nice, inexpensive (as your budget warrants) condensor mic. I'm sure others will respond similarly. For vocals, it a night and day difference from a dynamic mic. If you do any acousic guitar it will improve sound dramatically. Now I have a Marshall 2001--it was under $200, had a 1" diaphram and I've been pleased. If you have more to spend you will find a thousand opinions on the matter. Do a search in the microphone forum for mics you might consider. By the way, a condensor mic will probably necessitate the need for a mic preamp because the FD-4 has no phantom power--condensor are powered either by phantom power, baterries or they will come with their own power supply if they are a tube unit.
3. Get a compressor--this can really add punch to a vocal mix.
Hope that helps.
Peace, Jim
