Thank you, rvpiano, for this post, and thank you—again!—Herr Magister (Mahgister?) for your many contributions to it. A few humble comments of my own, then.
First, what we seek in listening to a piece of music is an ability to perceive what is in the score; I hesitate to say it, but "what the composer intended to express" (I'm well aware of the dubiousness of the notion of musical "expression"; there's a vast literature on this). The point here, though, is that one must be able to hear how counterpoint interacts with the main melodic line, how the "ground bass" integrates the whole, and, well, many other things. But these "things" are transparent, or at any rate accessible to perception, when a fine performance articulates them. On the other hand, a bad recording can submerge such careful expression in noise: tape hiss, bad acoustics, poor microphone placement, etc.
My point: both performance and recording engineering aim at essentially the same objective: transparency of the original musical conception.
Therefore, the opposition—good recording or good performance?—is really a misconception. What the listener will be most delighted by is the musical ideas in the composition. These must first of all be communicated by the performer (pianist, conductor and orchestra, whatever). Then, they must be captured on the recording.
For what it's worth, I passionately disagree with those who espouse Holt's Law, or whatever it was. No, great performance (that is, interpretation) and great sonics are not in inverse relation! There are in fact many recent performances of many great works that are both well-recorded and brilliantly interpreted. I might almost compare this to the "art" of translation. In general, recent translations from German, French, Spanish, Italian, Russian are better than earlier translations. The standards translators are held to these days are far more rigorous than was once the case. That being said, there are nevertheless many old translations (Kemp Smith's of Kant's First Critique; Schlegel's translations of Shakespeare into German) that have never been bettered. One needs TASTE to discern what is important here; it's not just a binary matter of technology (recording) vs. artistry (performance).
Mahgister: you mentioned Pogorelich's performances of Scriabin. Do you know the DVD of his Bach-Scarlatti-Beethoven recital in the Veneto Villa Caldogno (and the Eckartsau Castle in Austria)? If not, seek it out on eBay, where it can be had for a few dollars. Fantastic! (Full disclosure: Pogorelich was part of my past in an important way.)
