Microphone setup for recording

Hey,

I'm teaming up with a bunch of people in order to do some charitable music recordings. Genres vary from classical music to jazz/blues. I was wondering about the possible setup for it. My question is centered around the recording microphone, which we could buy for future use as well. But the thing is that we don't need compact disc quality sound, but we don't want the recording to sound like a pair of tin cans either. We'll at least try to imitate a studio environment by using mattresses and pillows, but won't be able to rent an actual recording studio.

Questions as follows:

- what microphone would be the best balance for this?
- what kind of audio packaging e.g for MP3 would keep the sound quality good enough to download from a web page? I assume anything less than ten megabytes is good enough for modern internet connections.

I appreciate your time and wisdom as I know there are a lot of professionals on these boards

 

Thanks. I'll ponder about both options.