Good topic... here's my $.02...
i'm working in a production environment 90% of the time... sometimes the band knows clearly what they want and they simply need the right producer/engineer team to help them accomplish this... other times they have no idea what they want and need to be steered in the right direction. I have no problems with either scenario, but it must be determined before we begin tracking which direction the project is headed towards.
Most of the bands I work with want to track things individually, the good ol' "builidng the house" production approach: Lay a solid foundation (drums), add lumber frame (bass), insulation and drywall (guitars), stylistic design (vocals), finally decorate to taste (mix). I haven't encountered many musicians that could pull off a live tracking session and get away with a modern sounding result from it, at least not relative to the genre I most often work with. Nothing wrong with that approach, works great for some cats. Just not the ones I work with regularly.
Knowing what i'm getting into, i'll do whatever it takes to get the sounds I/we want to tape. If it's something risky, like a guitar effect we're not totally 100% on, we might do one track with and one without, just to be safe. Regarding mic preamp/EQ/compression, it's all about instinct. Sometimes it's right, sometimes it can go either way, sometimes it's dead wrong, and only experience can tell you that. The more you do it, the more obvious it becomes. Sometimes i'll rip EQ mercilessly to tape (or DAW in my case), other times i'll go in flat and save it for later. Never can tell beforehand either.