I use a mic preamp with a High-Z setting (for guitars and basses) and plug my electric guitar directly into it (no amp) and it sounds great. I have two
Studio Projects VTB-1 preamps ($100 each) and these are excellent, especially for the price. Then I use software plugins for effects.
Once school slows down (I've been
VERY busy the past few weeks) I'm going to make a lesson (with samples) about using the free effects plugins listed
here for the guitar.
-tkr