The nylon string acoustic guitar has a softer, mellower sound than the steel string guitar. Strangely, modern audiences can still be spellbound by the depth of feeling of a nylon string guitar. It’s entirely up to you which one you choose to play. I could cite a list of artists who used either nylon or steel string for this or that record, and make a wild guess or two at why the artists made the choices they did, but the bottom line is that if you want a deep, quiet sound that doesn’t compete with your singing, the nylon string guitar is the way to go.
When you go out to buy a guitar, go past the general music store and on to your local guitar dealer if you have one. That way you will have a guitar expert guiding you and not some dufus who only plays two-and-a-half chords. Don’t let the guy in the store automatically steer you to the top-of-the-range guitars, and equally don’t succumb to your inner cheapskate. Pick a guitar that you like the look, sound and feel of, then come down in price range if you really need to.