Three Basic Types
Transducers
Piezo elements and transducers are essentially the same thing. These materials create a vibrating electrical current whenever they are placed under pressure and vibrated at an audible frequency. This alternating current is low voltage and must be manipulated to sound better. Some companies, like K&K are making transducer elements with a good natural tone by themselves even when running "passively." However, they don't perform at a professional level without a preamp. All transducers achieve the best sound possible with they are preamp-ed, or active.
Magnetic
The pickups you see mounted in the soundhole are driven by "magnetism" imparted on the strings. Without getting into the details of electromagnetic induction, just know that magnetic pickups use the same mechanics as electric guitar pickups to create signal. They will only work with steel string guitars. They will not work with classical or nylon string guitars. There are many different types, and only the active models are worthwhile in our opinion.
Microphones
Internal and external mics are available for acoustic guitars as well. We aren't talking about recording mics on stands here. These are small scale condenser mics that get mounted on or in the instrument. L.R. Baggs makes a specially designed microphone that attaches to the bridge plate. This is the only standalone mic we recommend. Microphones are best used to supplement one or more of the pickup types discussed above. There are a few others we like that are used to blend with a transducer or magnetic pickup signal.
Dual Source
[…] these are outside your price-range, be sure to check out our review of the best single-source systems. You can find that post […]