A couplea things. First, I always recommend micing a guitar amp (theres another thread about this floating around somewhere). Even if you get a good direct sound, its still going to sound better blended with a mic in front of the amp.
As far as an isolation booth, there are various tricks depending on what you're looking for. If you want to stop sounds coming from the outside in or from the inside out (or both). Do you want a dead room or is the room a part of the sound you want to capture?
Im sure there are good resources for some of this online. Theres a great book on studio construction techniques that keeps budget in mind that I recommend alot. Its called "Building a Recording Studio" by Jeff Cooper. It covers building a self-contained booth as well as modifying an existing room or building mobile barriers.
