Well mic quality will definatly effect your overall quality. The 2 mics I bought were 100.00 each and do not require batteries or phantom power. Dynamic mics do not need batteries and condenser mics need a power supply. Condenser mics that use batteries or phantom power will sound better but can cost more. Tonight I will upload a sample of what I have captured with my set up. A hot shoe is a mount on top of the camera for an extra devise like an external mic or light.

Usually Sony provides power for their electret series of microphones and places it right next to the mini-socket for the external microphone. The power socket (green in color) will supply the 3VDC required for those microphones.

The Sony electret microphones sell for around $80 (list around $120 I think) and these are quite good microphones within their limits. I once recorded a string quartet with one of the stereo electrets by placing the microphone in the center of the group, placing a hairy wind muff on it (the wedding was outside) and feeding the output into my PC-110 backup camera. The members of the Quartet thought the recording made that way sounded better than the recordings they made in a studio for their latest CD.