I agree with the posters above when it comes to "serious" sounding releases BUT ... if you are starting out and this is you first release, I would always suggest recording a "live EP". Doesn't cost much, can be done in a weekend and can give you credibility with promoters and fans alike.
Goes like this:
Set up the whole band in the studio (without the vocals). Make sure you set everything up so that you get some guitars coming into the overheads and drums coming into the guitar mics. Play and record all song simultaneously until you have decent takes that have very few mistakes in them (don't make them perfect, you NEED mistakes!). Also record single kick drum hits. Or bass noise or something.
Then overdub the singer using an SM58 or Beta 58 or something. Also make sure you overdub him while the playback is fed to him via monitors, not headphones. Make sure he sings 95% right. Small mistakes are good here, too.
Have the engineer mix it all with a lot of live ambience and insert crowd noise in between songs. Make sure you use something that fits your status. I always use bootlegs from club gigs for this. Decide on very few, very short announcements that the singer can make. You can even fade the crowd noise after song in and out, to make it look like you took a "not-so-good" song out of the CD.
Name it all "BAND XYZ - Live at the (Insert Clubname)", put a nice live shot of your band on the cover and you got a great demo that is inexpensive, sounds good and that bookers will love because they think it's what you sound like live ...
