What is the best way to go about recording music from an electric guitar? is there anything that you hook up to amplifiers or anything? I am a fairly good guitar player that wants to be able to record music and upload videos. Whenever I try to film videos using my mac, recording quality is shitty but totally expected. Do i need to shell out the big bucks on software? or is there any high quality tape recorder like things for guitar?
To get good quality you need to invest in an audio interface such as Focusrite Saffire 6, Line 6 UX2, or M-Audio Focusrite. Then you can either line in and use amp sims or use a mic, such as SM57.

Amp Sims vs. Mic is a personal preference thing, you can get awesome or shitty tone out of both. To be honest, the argument between the 2 is almost as valid as analogue vs. digital...
I'd agree mostly with FireHawk except for comparing amps and vsts to analoge and digital...

You don't need to shell out tons of money, but be prepared to put at least a few hundred into it. You get what you pay for and if you cut a lot of corners, it'll show in your finished product. A solid start would be $100-$200 for an interface (depending on if you want a mic and if you'll do more than just electric at any point) and at least $100 for a mic (new). Also count in a mic stand and cable if you go that route.

Think about if you ever see yourself (or a friend) doing vocals or acoustic with your setup. That will make a difference in the interface you choose. It doesn't necessarily have to cost more, but not every interface works with every mic so think about it some before you decide.
Side point is that most interfaces come with software of some description, usually Cubase or Ableton.

On the amp vs amp sim topic, it all depends on the amp, mic, and room you have. If you get the tone you want out of your amp, then by all means record the amp with a decent mic (SM57 is a good suggestion as others have mentioned), in a room that isn't too reflective or boomy.

If not, then definitely run a line straight into your interface and use amp sims.

Either way, you will still need EQ and other things to get it sounding the way you want it, but it is doable.
I've been trying for a while now to get a decent sounding distorted tone whilst recording. It has always sounded good straight out of the amp but when it gets recorded it sounded gross.

Today I played around and tried recording my amp (SM57, pointing at cone on angle) and DI. To do this I got my boss TU-3, and just ran a chord from the bypass out on the tuner into the Line In on my mixer.

After doing a few takes, slightly adjusting the amp gain levels to get it right, It sounded quite amazing, best recording I've done of electric guitars. I found mixing the complete dry DI track with the Amp track, it just gave it that cleaner edge, and defined things a lot more. Will def be using this technique in the future.
There is no "best way."

I record DI. That way I always have the option of routing the channel through whatever amp I want (or just the monitor) and miking that with whatever mic I have.

I could record an entire album's worth of guitar at home for free, then pay for studio time only to mic it up with a $5000 ribbon or something, and pay $150 for the whole shebang.

Once you plug into a certain amp, mic that, and then process it however you are going to do that you are locked in to that sound.

I am not locked in at all, except to the distortion if I choose to distort.

A quick and easy way to sound better automatically is to simply record two different takes and pan them hard L and hard R. Stereo guitars are always juicier, fatter, meaner, etc.

Throw one down the center and you've got a wall of ass-kickage you don't want your mamma to hear!
"Virtually no one who is taught Relativity continues to read the Bible."