Here is one example of many in regards to recording and mixing an acoustic guitar. Here are some of the highlights from this video presentation.
We want to make sure our preamp has enough signal. We then want to find the most comfortable position for the musician so he can play to the best of his abilities. While he is playing we try to find the optimal microphone position until the artist and engineer are happy with the sound. Again we want to make sure we are getting a healthy signal through our pre-amp.
For this case we used an EQ and boosted the mid-high frequencies to add definition to the sound. Then we cut the lows to eliminate any unwanted sounds that made it into our recording. We inserted a compressor to control the dynamics, but only around one and a half to two decibels. Lastly I added a reverb to give the instrument a feeling of space.
For more specific details make sure to view the video above.