With that budget and current models, you can get a HD (High Def) camcorder, a HDD (Hard Disc Drive) model, but not one which is both. (The only HD+HDD camcorder today is the Sony AVCHD camcorder, the Sony HDR-SR1, web price around £850).
If you go for HDD but not HD: The models to consider are the Sony DCR-SR90
http://www.pricerunner.co.uk/sound-a.../564220/prices or the JVC GZ-MG505
http://www.pricerunner.co.uk/sound-a.../621686/prices
Neither of these have component output – I don’t know of any standard def cams with component output. Both these camcorders are very good, but standard def HDD cams use the same MPEG2 format as DVD cams, so as with DVD cams the quality is good but not quite as good as with a similarly priced DV (tape) camcorder.
If you go for HD but not HDD: The Sony HC3 as mentioned in the previous post is in your budget, is excellent, and has component (as well as HDMI) output. Or the Canon HV10 – also has component output, though the cheapest prices I’ve seen are just over £800. Both these camcorders are HDV, use same tapes as DV. With a decent spec PC editing of HDV is as easy as DV… with a slower machine it can be done but requires additional steps.
All of the camcorders I’ve mentioned so far are of a similar small size.
If you want to stretch to £850, then there is the Sony HDR-SR1. It’s a little larger than the others, but not huge. The only downside (apart from the price) is that this AVCHD format currently is not easy to edit or view with software. Software support should improve (this is a new format); but if you want to play the files from your PC you’ll need a pretty powerful one.