Nick,
Since we just had our first baby, we went through the camcorder buying decision recently as well.
The first choice for me was HD video or not. I decided I wanted HD... No good reason other than that when my daughter is 18, video will probably have 3x the resolution and at least having recorded it in HD now will be one step ahead of having chose SD video which is already one generation outdated. The biggest downside to HD cameras a few months ago was that their optical zoom capabilities are far worse than non HD cameras (not a big issue for me, but it might be for you).
Second choice was digital video tape versus HDD versus flash drive. Tapes are aging technology and going out of style, so I ruled those out. HDD was my next choice, (and my original preference) but it added too much girth to the camera for my preference and a few of the models I read about actual said that they could hear the head on the HDD spinning on their recorded videos, which definitely caused me a little worry. I'm sure they're not all like this, but it was enough to make me think twice.
So, once I'd narrowed it down to Flash-based, high def cameras, there were only 2-3 from which to choose. The one I liked the best was the
Canon Vixia HF100. For < $600, it had everything I was looking for. This model does not come with any onboard memory, so you have to buy the flash card separately. (I picked up a 16GB card)
The HF10 is another similar option that has 16GB internal flash memory and the ability to add another 16GB card. It was cheaper to get the HF100 + buying a card on my own, so I went with that one.
Since buying, we've been extremely happy with it. It's very compact, takes AMAZING video, and the file format it uses can be streamed to the PS3 to watch the 1080p videos over our main theater room system. The biggest downside of the camera is definitely battery life, which isn't great, but hasn't been a seriously limiting factor for us either (yet). The other negative is that it does not take nearly as good of video in dim/dark conditions, but I think this is a limitation in most consumer-grade cameras in this price-range.
Happy shopping, if there's more I can do to help, let me know.
Jason
