Microphones are transducers which convert sound energy into analogous electrical signals which can then be transmitted to other audio devices for further processing, or storage.   
Two main types of microphone design are used, the dynamic microphone and the condenser microphone. 
The dynamic microphone uses the principle of magnetic induction to generate its signal. When an electrically conductive metal is made to cut across lines of magnetic flux an electrical current is generated within the metal of specific magnitude and polarity depending the direction, speed, and distance travelled. In the case of the dynamic microphone a mylar diaphram attached a small coil of fine wire called the "voice coil" is suspended freely within a magnetic field so that sound waves striking the diaphram will cause small movements with the result that the voice coil will cut across the lines of flux of the magnetic field and generate a corresponding fluctuating electrical current in the wires of the coil.  The condenser microphone uses an electrostatic principle in its operation. These mics emply two very thin plates, one fixed and the other moveable, which form a capacitor having the ability to store an electrical charge. If the distance between the plates changes the amount of voltage stored by the capacitor changes proportionally. A small voltage is applied between the plates either by battery or through phantom power. As sound waves strike the moveable plate it moves and creates a change in the capacitance of the pair of plates and a proportional change in the voltage stored by them. 
Also ribbon mics using a micro-thin flexible metal ribbon suspended in magnetic flux.  Also electret-condenser mics using permanent electrostatic charge over the plates. 
Boundary microphones are designed to operate in very close proximity with a large surface such as a wall or floor. The advantages of using this type of microphone are that phase cancellation problems common with distant miking techniques are virtually eliminated as the direct sound and any early reflected sound reach the microphone almost simultaneously with the result that the resulting very short delay restricts phase cancellation effects to above 10 kHz. 
On/off axis considerations. Off axis colouration high frequency attenuation.
Transient response is a measure of how quickly a microphone's diaphram can respond to changes in waveform. This can lead to wide differences in the resulting sound between microphones, particularly when used with percussive sounds. 
Dynamic microphones can have quite large diaphrams and in combination with the attached voice coil can make for a significant mass which can make transient response sluggish. Ribbon microphones on the other hand with their extremely thin ribbon elements can react much more quickly to changes in the waveform. Condenser microphones have the lightest diaphrams of small diameter and extreme thinness which typically give the best response to transients.
See Also:
microphone selection 
microphones (detail) 
microphone accessories 
mic placement
mic frequency characteristics 
polar response 
wireless microphones