I'm in a similar position myself, after reading quite a bit on here and elsewhere I think I've settled on the Sony DCR-HC90E. this can be had from
www.amazon.co.uk for £450 including delivery.
It is a MiniDV format which I believe gives better video quality than the hard disk/DVD recorders, it need tapes but these are very cheap (£18 for 10 with amazon for example). I plan to connect this to my PC with firewire and do some basic editing on there.
A lot of my shooting is likely to be indoors so I need a camera with good low light performance, I believe this sony is very competitive at the price for this. the other camera I considered was the panasonic 250 but I don't think this does so well in bad light.
have a look at
www.dvspot.com for some reviews and general buying tips.
I'd welcome comments from other users about this as I'm just starting out, maybe theres something glaring I've overlooked?
HTH
Owain