| What would you actually DO with your album? Do you the fanbase, and approriate outlets to actually sell any copies? Be honest with yourselves, and figure out how many you could actually sell, how much money you would LOOSE on such a project, and how much it would benefit you. In most cases recording an album is just a vanity project.
Chances are the demo route is a better option. You'll get experience from it, and it'll cost you less. Most of the benefits in terms of exposure, selling at gigs, having something to use for promotion are the same as for a full length album. No one who is interested in you commercially is ever going to listen to a full album anyway - pick your best three tracks and show those off rather than adding in 8 or so fillers.
Even if you've got the cash to do this out of your own pocket, a shorter recording allows you to work on getting the tracks perfect. When you try and record more the resources inevitably get stretched a little thin. If you can record ONE track that sounds brilliant, I might resonable consider that given more time (and money) you can reach that level again. 12 "good solid" tracks that sound OK just tells me that given more resources you could produce another mediocre album.
Record you three tracks at home, then take a half plunge and re-do those three tracks properly. After that you can consider recording your next three, and eventually you'll get a full album (though by that time the first three will sound lie junk)
Ian | 
