Well the camera store is talking rubbish, what a surprise there.
MiniDV itself quality wise is a 4:1:1 video solution at 25mbps. Its good enough quality for most people, and the upgrade from it (DVCAM.. hence people referring to their minidv camcorders as "dv cams" really shouldn't !) offers the same quality but with more security from droupout etc. The jump up in quality doesn't exist (remember I'm talking about the format itself, not comparing cameras.) Betacam SP is 4:2:2 , and well.. you can't afford it

(the 4:X:X level refers to the amount of compression. The closer to 4:4:4 the better, but you're talking about INSANE amounts of drive space to record with this. The Thomson Viper is a full uncompressed HD camera and it eats thru harddrives. They filmed some of Collateral on it, and storage was a major problem. Don't worry, you won't be able to afford one of these either

)
Anyway, thats just the facts about MiniDV.. its a good format and you CAN make professional movies on it without a problem. Thats cleared that up
Will you see a difference between a £200 and £800 camera? I'd hope so! You'll get more pixels and size will vary (even tho the CCDs are most likely 1/6" still) which could mean better low light use. Probably a better quality lens, and more manual control too. Don't expect good low light if you're spending under £2000 tho, you need a Sony VX2100 at the miminum for shooting in low lux situations, always ignore what the manufacturers say about lux capability, they're lying to get sales. (Ie "Min Lux 1... yep, it can record in a lux rating of 1. It'll look crap. But it'll record!) And for £800 you CAN get a 3CCD camera anyway.
The difference between a 3CCD and a 1CCD camera is rather than process all colours thru a single chip, it splits the RGB into 3 and each chip handles a particular base colour. Gives better colour saturation, sharpness etc.
Colin reviews the 750
here and gives it thumbs up, doubtful there'll be much difference to the 700 as its part of the same series. It all depends what you're doing with it.. as stated above, the quality on the TV should be the most important thing, if it looks good on the TV but bad on the computer, then its your fault I'm afraid
1. I don't think the canon allows it, but NEVER transfer video via USB1. Get a firewire card (there's a socket on the Creative Audigy's if you have one, and on a lot of new PCs anyway) and a cable, and always capture in full DV via this.
2. Are you shooting inside without much light? If its grainy, sounds like the camera is pushing the gain up to counteract. Gain is an electronic boost in decibles, and I imagine the max is about +18dB on your camera, and you want to avoid anything over 9/12 really. Only procams give you the ability to manually adjust the gain, so you have to just use proper lighting.
Don't give up on the format! Tell us what you're trying to do and how much money you want to spend, and we'll give you advise with regards to what to go for and what techniques to use. I'm sure there's others on this board who will know what consumer level cameras are "the dogs danglies" these days, as I haven't shot with anything that costs less than about £1400 for a year or two now, but anything other than specific models I might be able to help with.