Here's what our 3-piece band did:
We got a 16-track Roland recorder that records up to eight tracks at once ($800?), a Behringer 12-channel board ($300?), two Behringer quad-compressors ($99 each), a behringer headphone amp ($99 again, I think), three pairs of isolating headphones ($60 each), 4 SM58 mics and stands ($125 each? -three vocals + guitar amp), a pair of electret overhead mics and a big'ol boomstand for both of them ($300+130?), an AKG kick mic ($180?), good cables for the mics (man, can those get expensive!), eight insert cables ($don't rmember), and eight Y-cords (I'll explain).
Now we have seperate compression on the inserts of each of eight board channels - Kick, OH, OH, guit, bass (direct), voc, voc, voc. Yes, we're micing the drums with only three mics - and it doesn't sound bad at all!
The output of each compressor channel gets a Y-cord; one side goes back to the channel return, and one to the line inputs on the first eight recoder channels.
This works great, in that we can dink with the channel EQ's, fader levels, effects, etc. all we want for our own headphone mix, without affecting the recorded tracks! The compressors control the levels going to the record tracks - compress, brick-wall limit, and expander for each mic. Although we tweaked compressor settings a little, you perfectly-well could set-and-forget every channel the same, and get great results.
For our demo we just let the recorder run for several rehearsals, and picked the best performances. Then, being full-multitrack, we replaced tracks as needed, mixed it all down, and the recorder will spit-out a CD, ready to slap onto any boombox and GO!
There's obviously pretty much to get all together, but I'll give you all our settings if you want, and you can copy'em. It's not really that bad, and our demo sounds great.
Getting the sound to the tracks IS somewhat of a no-brainer once you get the compressors preset, honestly; you really could just copy our settings, and you'd have good, solid tracks. The mixdown is where it's good to at least have a sound-person involved. I engineered and produced the demo, and also designed the acoustics for the room that we recorded in - but you wouldn't have to have an acoustically-correct room for anything you're close-micing or running direct; good acoustics does help a lot with the drum sound.
Joe