On top. As close as possible with out sacraficing sound quality. I usually use an Audix D1 cuz its a relatively short and small mic and easy to position.

It of course depends on the style you're after

1. mic at top edge pointing at center
-> smack: hard with low
2. mic at top edge pointing down
-> smack: hard less low
3. mic at side pointing to wood(?)
-> tok: ring
4. mic bottom between snares and top pointing at top
->
5. mic bottom under snares, pointing at them
->zing:
6. etc.
7. no snare mic, just 1 bd and 1 oh, or maybe even only one roommic?

and every variation in between
just try it out for yourself, try some different mics while you're at it

cheers

In the hole?
What hole?
That little 1/4" hole on the side?
You have a mic that fit's in there?

The BEST way to record a snare drum is the one where the drummer doesn't hit the mic or have to alter their playing style.

Just like other things in life, try to keep away from that "little hole".
You'd be amazed at the artifacts you can get with the "blast" that can emanate from that spot, especially if the drummer slams it.
Nat's right about keeping the mic ( a 57, right?) out of the way from the drummer and not hampering his/her style.

Here is the big problem in answering this.
1. Drums make a huge difference: Heads, shells, tuning, snares
2. Drummer makes a huge difference
3. Mic and mic position make a huge difference (and can the drummer sope with the right mic position)?
4, EQ makes a huge difference.
5. Monitors make a huge difference.

Again, I'm not the most experienced at recording. But I've spent hours with drummers with a new snare and a new head trying to find the sweet spot. There is no magic formula for this, though there are (as you have read above) guideline. Get some friends together (one of whom is a good drummer). Buy some cold cuts. Get ready for a long weekend.

A really nice way of recording a snare is to:

1) Place a mic on top facing the center. make sure its not going to be hit by the drummer.
2) place a second mic under the snare facing the center of the metal grill thingy (dont know the english name for it)
3) reverse the fase on the second mic and get ready for the recording.

the sound is great believe me,

..

Freakstudio nailed it. Thats the way to do it if you have the extra channel to spare. Also, before you insert a gate on the signal, try some moongel or slightly tape a credit card on the snare, placing it somewhere out of the way of course. It'll dampen and control the sound some more, if that's what you're looking for.