I had lots of helpful responses to my query on digital video cameras. Also Sony digital 8 that plugs directly into firewire port. Recommended Avid editing software for its easy use. Premier software good too, just a little trickier.
Picture quality increases with price.
Works with firewires for editing. This one has progressive scan CCD, good for fast moving subjects, better video. Good in low light. Some of my respondents have been reading up on this subject, so there is literature on there.