Mettallo ,
Rooneys " experiment" has shown that at least in the point and shoot dept some camcorders are able : If your photography needs are relatively simple . go for it.
What is lacking is some of the control you get with a standalone camera when you feel the need to get more adventourous in your photography.
By that I mean changing iso settings, white balance, perhaps setting for portraits, landscape , macro etc. which influence your control of exposure ,colour tone, depth of field and manual focus to compensate for a struggling auto focus in low light or poor contrast situations.
Thankfully most digital camcorders of that price range will have manual adjustments such as :iris control , gain, white balance and backlight compensation for the video side of things.
There is of course nothing to stop you from starting with a decent combo and then buying a Separate Digital camera if and when your ( Photography) needs grow
Coming from Video 8 you will love the clarity of digital ( some say digital is too " sharp" compared) video on MiniDV and on the PC/ Mac :the ease of editing and minimal quality loss when the need for that arises
Good luck