I am in the process of creating an audio design portfolio for game developers and I have purchased an Olympus digital voice recorder in order to record sound effects out in the real world. It is capable of 44KHz, 16 bit recordings and has a built in stereo mic. My question is, will this recorder be sufficient for what I am trying to do? I suspect the only potential problem would be the built in mic but I can always purchase a real mic in the future and plug it into the auxiliary input. Thanks.

Which model did you get? Many of the Olympus recorders are very good for recording voice data and very bad at recording anything else.

A built-in microphone will not be good enough, no matter what the device. You will need a high-quality external microphone.

Excuse me for saying so, but actually asking that question means that you probably don't have any experience with live sound capture. Why are you trying to "build a portfolio" doing something you don't know how to do? Wouldn't it be more helpful to just teach yourself on some number of projects (probably assisting someone who already know) instead?

If you're interested in field recording, you will definatly need something a bit more substantial than a voice recorder with an integrated microphone. Take a look at this. The PMD670 accepts two balanced microphone inputs via XLR jacks and provides 48+ volts of phantom power for use with condensor microphones. You may want to think about investing in a good mic or two depending on what type of subjects you're interested in recording. Try looking for a shotgun (or any other small diaphragm condesor) microphone and a good wind-screen if you're doing outdoors recording. A mic with a cardiod pickup pattern is a must so that you pick up the subject you are recording and reject a bit of the unwanted noise.

Thanks for all of you input, I think the answer to my question is no. I thought that recording some effects would increase the chances of getting a job writing game music which is what I really want to do. I don't have the money to get into this aspect of sound design so I will just try my luck with the music alone.