Thank you for suggesting a topic that doesn't include the word "DAW" in it. We needed a break.
Acoustic guitars have always been a problem for me because they are acoustical instruments, and are therefore subject to the acoustical environment they're recorded in. Rooms optimized for mixing are too dead to be good environments for acoustic instruments. If you don't have a great-sounding room, you're not going to get a great-sounding acoustic guitar recording no matter how much the microphones cost or where you place them. The best you can do is make the best of what you've got.
If your room sounds really awful, that means eliminating it from the equation as best you can, using absorptive materials. The guitar won't sound great, but it'll sound less bad. In that situation, you'll want to get the microphone close to the instrument or use an internal pickup or contact mic if it has one. I'm not a fan of microphones inside guitars, as they sound boxy. A better solution is a directional condenser mic placed as close as feasible, pointed down the neck to approximately where the neck and body join. You have experiment to find the best place to aim the mic.
If your room sounds big and reverberant and doesn't have strong resonances, then you want to exploit that. That means either an omnidirectional mic positioned a couple feet away, or a combination of cardiod condenser up close and another microphone 4-6 feet away. Ideally, the player is sitting about 1/3 of the way into the room, not in the exact center and not in a corner. If you have no choice but to be in a corner, face the center of the room and avoid pointing the mic directly at the corner.
Most people recommend small-diaphragm condensers, but I don't own one. However, I've gotten decent results even with cheap LDCs by taking the time to try different positions. Where you point the mic is more important than the microphone itself.
In a pinch, you can even use a dynamic microphone; just don't get it too close to the instrument. Some dynamics, high-end ribbons specifically, sound gorgeous on acoustic guitar, but expect to spend a grand or more if you go that route. A better approach if you're shopping is one
good multi-pattern large diaphragm condenser that you can use for many purposes.