After a couple of months' experience with the Baggs Lyric Classical pickup installed in my Cordoba C5, I've finally figured out how to get it to sound right -- and now, it's sounding *very* right, just what I had hoped for, about as good as an internal pickup could be expected to sound.
Of course, "sounding good" is relative. Sounding good to play classical music in a concert hall or on a recording? No way. But sounding good to accompany myself on "House at Pooh Corner"? Yes, it's all that.
The trick, I've discovered, is to *NOT* turn the volume control all the way up. Volume all the way up produces a raspy, maybe "clipped" sound, which disappointed the heck out of me when I first had the pickup
Having the volume control about halfway, and in some cases using some sort of pre-amp (depending on what system I'm plugging into) gives a very acceptable, fairly natural sound perfectly suitable for pop music or for players of my caliber.
Going directly from the guitar into a Fishman Loudbox Mini gives very good results, provided you're at no more than half volume at the guitar. Directly into a Mackie mixer likewise very good results. Directly into the house Fender powered mixer at my open mic gives either not enough horsepower, or the raspies.
If you peruse some of the demo videos on the web, you will hear in some of them the raspiness I'm talking about, while in other videos it sounds fine. The difference appears to be the volume.