If one were to analogize audio recording to photography, the microphone would be like the lens of a camera. While the body of the camera remains an important component of the system, it is the lens that ultimately is the primary factor in determining quality. Microphones similarly play an crucial roll in the sound quality of audio recording. Using a cheap microphone on even the most advanced audio recorders will result in terrible sound.
While there are many types of microphone technologies on the market today, there are two fundamental microphone types that you will find at most stores. Both types range from cheap throw-away models to very high-end professional grade models. It's important to purchase a professional microphone of a reputable brand. These generally range about $100 - $300.
Condenser - These types of microphones require an external power source, and are usually used in studio environments. They can also use something called "Phantom Power" where the microphone input will add electricity to help power the microphone. The drawback for these types of microphones is that they are not very durable, and are susceptible to moisture and the elements. They are not ideal for field reporting.
Dynamic - These types of microphones are very durable. They range from cheap to expensive, but the major benefit is that these microphones can withstand moisture and the elements quite well.
Note: ENG stands for Electronic News Gathering. Consider this when shopping for audio equipment.
Both types of microphones have a particular "pick up pattern" which defines the area it is most sensitive to capturing audio. Omni-directional microphones will pick up sound from every direction equally, making them great microphones for ambient capture. Cardioid microphones are more directional, and allows the recorder to point the microphone the direction in which they wish to capture audio. Both have their advantages and disadvantages in various situations. It is important to purchase a microphone that is suited for the environment you will be recording in.
Generally, directional microphones are good for interviews because they help to eliminate surrounding ambient noise. However, very directional microphones, like shotgun microphones, can be tricky if they are not pointed exactly at their targets.
Omni-directional microphones are good for capturing environments and ambient sounds. If you wanted to record a room, or say a band where the source of the sound is coming from various directions, omni-directional would provide the best coverage.
There are so many types of microphones on the market today, it is hard to specifically make a list of all of the best brands. At the UC Berkeley Graduate School of Journalism, we use Sennheiser MD 46 dynamic handheld microphones, which have proven to be extremely reliable, and of high quality.