Panasonoc HDC-SD5 is your best bet for a card based cam and the Canon HG10 is the current flavour of the month for HDD, but both of these shoot in 1080i format rather than the more limited 720 of the Xacti (and others like it). They are way over your budget, too.
I started off looking at a Xacti, bought an SD7 (import upright version of SD5), and now I use a Canon HV10, which is tape based, just because it is better.
You can often get ex-display or refurbished HV10s from eBay at just over £300.
'Tis a
real camcorder, sir.