It totally depends on the sound you're going after.
David Gilmour has 4 racks of simulators and effects, all running into a Marshall tube head, which is then fed through a dummy load and into a mixer.
B B King plays Lucille into a Bluesface and it's miced with a single SM57. every time, or almost everytime. In his younger days most of his stuff was recorded with portable recorders.
Drums are almost always mic'ed separately in a drum booth, and bass goes direct into the console (this again depends, but usually direct is best for bass and keyboards, which benefit from flat frequency response). Some keyboard and organ guys hook up to a Leslie, and then mic it.
Acoustic and electric guitars are almost always mic'ed, acoustics on their own and electrics through a mic. Percussion is again always mic'ed up.
And there are the oldest Beatles performances and the first few Santana albums (where he actually sounded real good), which were recorded all at once on to a 4-track (everybody in the booth at the same time), and that's some of the best music ever made in the history of the world.
So yeah, it depends.
Lee Handmade | Takamine EG-240C | Yamaha Classical | Reynolds beater | Tansen electric | RP300 | Marshall MG30RCD | Behringer Eurorack | E-mu1212M | Delta 66 | lots of other crap