I recommend the Sony HDR series
Guys.. I can
highly recommend the one I bought myself a few months back - the Sony HDR-SR7.
I have owned and used 4 other cameras over the years (and I'm usually a little picky about what I buy), but this one far surpasses them all.
First of all, it records in high-definition (true HD) and the images look crisp, detailed, and vivid on my 61" HDTV. The image quality is
astounding, colors look alive and accurate. It uses Carl Zeiss optics and has a nice flipout touch-screen that really works better than you'd think. It also handles transitions from bright to darker backlight real well (at least for a camera in this price range). Lower-end cameras will typically have problems doing these types of light adjustments too quickly.
Secondly, it records to a built-in 60 Gigabyte harddrive, which is really convenient. I still have lots of room on mine.

And...no more fumbling around with slow tapes that you have to rewind, etc. Just instant recording to a new file that you instantly review or delete on the fly.
It also has an impressive battery life. I film a lot with my kids and family and it feels like I rarerely have to charge it. My older cams sucked out the battery in no time.
You can pick up a new on on eBay for around $900. If that's out of your price range, consider Sony's lower spec models too. I believe there's a 30 GB model as well as one that records to a memory card instead of a harddrive.
I really love my HDR-SR7. If you read around about it on the 'net, you might find some people complaining about its recording file format. It uses Sony's AVCHD format for HD compression, which again uses x.v.Color encoding. I'm not gonna bore you with the geeky explanation of those terms, but what I will say is that I have had NO problems whatsoever with the file format.
The clips transfer just fine to my 3 year old desktop PC, and I can easily convert and edit clips using the included software (or Total Video Converter) and VirtualDub (or Windows Movie Maker) for editing. You can use a lot of other tools as well. Hint: If you read about people having trouble converting the files - it's because they didn't do their homework on what software to get.
If anyone's interested, I'll see if I can post up some clips I made with the camera.