Right, so i am not very good at setting up an area to record at a decent sound. I have a 20 dollar mic that i put on the ground. So i wanted to know...

A: where should i put the mic when im recording?

B: Does the mic quality matter? (alot i mean)
What exactly are you recording?

Mic quality does make a huge difference, More so to people who want good really good quality recordings.

Your $20 mic is probably a dynamic mic that will make things like acoustic guitar and vocals sound really bassy. You'll probably want a condenser microphone but i need to know what you're recording.
I record anything from vocals, soft electric to hard almost metal sounding music. Mainly I want to know what I need to make my lyrics sound like they do live.