I wish I caught this thread earlier. I used to do music and sound work before I got into visual arts, so here it goes.
First, you can get really good results with a $40 microphone, and you can get really crappy results with a $300 one. What really matters is acoustics and background noise.
When I record audio for voice acting, ads, tutorials, or whatever, my set up is an Audigy 2 ZS Platinum, a Shure PG58 dynamic mic $60 (my old one was a $40 and it worked just as well), a boom stand and a pop-filter to go with it. That’s it, which means when I go to record voice actors, I bring my computer along. And actually the pop filter is optional, but it helps if you want to record whispers and they have to be really close to the mic, otherwise the actors are so loud anyway they have to be far back so the audio doesn’t clip.
The reason why the audio sounded as good as it did was because we found a classroom that had textured walls, and no air vent noise. You shouldn’t have to apply a noise reduction filter for it to sound decent, because the filter also washes out the S’es and other consonants.
Recording outdoors is tricky because there can be a lot of background noise, especially in urban areas: wind, cars, construction, noisy people, etc. You need at least a wind muffler and a shock mound for recording outdoors, and a really good mic, and that gets pricey.
What you can do, is record the ambient noises on set for where you are recording video, and then do what’s called ADR, which is record all the spoken lines again in a controlled environment, and then mix the soundtrack together. Voice, background noise (just enough so it doesn’t sound like it was recorded in a studio), and push any other sound effects like fist impacts and so on. Basically you are crafting the entire soundtrack, and you’ll get much better results doing it that way if you are short on a budget, and can’t afford appropriate gear for recording outdoors. It’s also a lot of fun rerecording your voice and trying to lipsync to yourself.
I do have to stress the importance of having a decent sound card though. The internal cards that I’ve used, even the current generation of Realtek sound cards, have bad signal to noise ratio, and a bad DC bias. The Sound Blaster Audigy Platinum, though not audibly better for playback than the Realteks, has much better recording quality, and actually has an input for my microphone, and the mic is just the right volume, whereas the Realteks do not.
And yes, having trouble when picking up voices from further than a foot away is normal, for a dynamic mic anyway. When I record voice the sweet spot is about 8 inches. The reason for that is because of the way microphones work. A dynamic mic is basically a reverse speaker. Mechanical movement of the diaphragm attached to a coil moving back and forth inside a magnetic field creates the signal. Then you have a condenser mic, where the diaphragm is a thin piece of plastic coated with gold (or some other conductive metal) on the back, and is suspended away from a conductive plate. When the diaphragm moves, that changes the capacitance and creates the signal. For condenser mics to work, you need phantom power while dynamic mics don’t.
Because condenser mics use capacitance instead of electromagnetic induction, they are more sensitive, and I mean very sensitive. That is why I own a dynamic mic as opposed to a condenser mic; I record voice almost exclusively. Condenser mics pick up every noise in the room, even the rustling of your clothes when you talk. They are great for recording sound effects and groups of people in a studio, but I prefer to hear only the voice and very rarely do I get to record in an actual studio.
So it’s really a matter of what you are going to use it for. If you use a condenser mic, and you are recording indoors, make sure your room has studio like acoustics. I’m sure your’s doesn’t and mine certainly does not, but with a dynamic mic it isn’t doesn’t matter as much.
Hopefully that helps in making a decision. Again, if your are just having trouble getting the voices to sound clear enough, try ADR. You’d be surprised how a few ambient tracks, sound effects, and voice, all recorded separately and mixed together at the right levels can really make the soundtrack sound like a million bucks, without spending that much.