I use two different camcorders. Both use mini-DV tapes. I strongly recommend tape over DVD unless you are going to get a camcorder that supports full size DVDs. The mini-dvd is more expensive than the mini-dv tape and it does not add anything to the quality of your product. I use a $1500 Sony for recording special events and some of these wind up on our local cable channel. For my portable camera, I use a Canon Elura 100. For pure quality, the Sony beats the Canon hands down (of course) but it is large and bulky and not something I would want to carry around a theme park. On the other hand, the Canon 100 will fit in the palm of my hand, the mic is excellent, and the quality of the video is better than I expected from a $300 camera. Both cameras have firewire output for playing the video into a PC. Both allow me to output the video to PC and record to tape at the same time.
The tapeless (ie., HDD) camcorders are not yet able to deliver the video quality that i would expect for a camera of the $$ and you get quite a bit of noise from the drive in the ones that I have tested. My recommendation would be, if you are going to spend that much money, put your money in a mini-dv recorder.
As to HD video, that is a choice you are going to have to make. The price for HD equipment is still high, although it is coming down. You can purchase a very high end SD recorder for the same money that gets you a basic HD recorder. And yes, HD is higher quality video than SD, but for recording a family event, does it really make that much difference?
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