The acoustic grand piano is considered one of the more difficult instruments to record satisfactorily.  There is no "right or wrong" way to do it, but there are techniques that can yield consistent and predictable results.

The simplest way is to lift the lid and place a pair of small diaphragm condensor mics at the very end ("tail") of the piano, around six inches from the opening.  The mics can be mounted on a Tee bar.  The Tee bar made by Beyer Dynamic is adjustable, so you can experiment with the spacing and angles to give the desired stereo spread.  This technique avoids one of the biggest problems of piano recording-action noise.   It also yields a rich, big, speaker filling tone.

If you want a more up front, percussive sound, consider removing the lid and suspending your pair of small condensors from the ceiling pointing toward the hammers, or placing them on a large boom stand over the hammers.  Vary the distance between mic and piano to change the ratio of room to direct sound.

Total isolation of the piano tone can be achieved by opening the lid, placing mics on boom stands at the bass, middle, treble sections near the hammers, and two more mics in the middle of the piano, and covering the piano with moving blankets.  Mix each mic to taste and add reverb and echo.

Which mics to use?  Small condensors from Neumann, AKG, Sennheiser, Sony, Shure, Rode, and the like will give excellent transient response and wide dynamic range.  My personal favorite is the Neumann KM140, a high end mic, but you can get good results with less expensive models.  The cheaper condensors tend to be of the electret, or permanently charged variety, and usually don't sound as full and deep as a true, 48Vphantom powered condensor.

A more advance method is to use small ribbon mics.  I long to get my hands on a pair of Royer SF1's and mic up my Steinway grand.  They could very well be more accurate than the best of condensors.
Whatever mic or micing technique you use, you will find that the percussive attack of hammer-on-string will produce a strong transient. This means that each note makes a sound that is very loud and very soft. If this dynamic range is not limited, you will get distortion on each note. The way around this is to use a peak limiter. This can be a software program or stand alone device that senses the loudest part of the note and keeps it from exceeding a pre-set level. You can also use compression, which limits the peaks and raises up the level of the quiet part of each note. If the piano is being used as a backup instrument in the ;mix, compression is the way to go. As a main or solo instrument, limiting will keep the transisents tamed while allowing for expressive music making.