Buy a tripod and the pictures won't be shaky.

Keep your fingers off the zoom control and the pictures will look more professional.

Mini-DV and DV cameras are plenty sharp enough - you can connect them to your computer to download via firewire if your computer has been built in the last four years or so. If you're running XP it has a movie maker installed.

Buy an extra battery.

Don't buy a VIDEO camera based on its STILL camera performance; that's like buying a Ferarri based on how big a trailer it will tow.

NTSC video maxes out at 720x480 resolution, which coincidentally is the resolution of a DVD.  (This is standard resolution; HiDef is a whole other animal).  720x480 is about half a MegaPixel.  In order to make a video camera take "better" still pictures, the sensor (usually CCD) must be modified in such a way as to compromise its ability for VIDEO.  Not a good trade-off.

In the price range we're talking about (under $500), you are limited to single-CCD cameras.  Better, more expensive cameras use 3 CCDs, and can provide much more accurate color and a more even picture.

The primary things you want are a big lens, to gather as much light as possible, and a sensitive CCD and associated electronics.  This is important because the primary reason that modern video cameras look bad is because of poor and/or insufficient lighting.  The better the camera performs in low-light, the better your video will look.  Note that nearly any indoor setting is considered "low light" unless additional lighting is brought in.  Low-light performance cannot be stressed enough, and is only less important if you are wanting the camera to, say, shoot video of your son's Little League games outdoors.

Another thing to look at on a camera is OPTICAL zoom.  "Optical" means how much zoom the LENSES provide.  IGNORE any mention of DIGITAL zoom entirely, as digital zoom means cropping a section of the picture and stretching the size of the smaller number of pixels to fill the screen.  Quality is greatly reduced with digital zoom.

Finally, look at ergonomics.  Make sure you understand how to use the focus and zoom controls.  Does the camera have manual focus available?  Autofocus can have problems in some situations, and if you are putting the camera on a tripod shooting at a fixed location, then manual focus will ensure that the camera doesn't get confused by people moving in and out of frame, causing the camera to constantly try to shift focus.  Also, where possible, try to buy a camera that has a side-loading tape door, though this may be difficult in this price range.  It is much more difficult to change tapes with a bottom-loading camera when using a tripod or other accessories.

Definitely stick with MiniDV.  Older formats, such as Hi8 and Digital8 are obsolete.  MiniDV will allow you to import video to your computer for editing via FireWire/IEEE 1394.

Pick one brand and model of tape and STICK WITH IT.  Pros have found that the different formulations of adhesives and lubricants used on different types of tape don't always play well with eachother, so it is best not to mix them.

NEVER shoot in LP (long play) mode.  Let me repeat that.  NEVER SHOOT IN LP MODE.  Always use SP (standard play).  LP mode means the tape runs 1/3 slower, so you get 50% more time per tape, but it also means that the chances of data dropouts goes way up and camera-to-camera compatibitily goes way down.  Don't do it.  Also, do not buy tapes longer than 60 minutes (SP).  The 80 minute tapes use much thinner tape that is much more prone to damage and dropouts.

-Troy

Oh, and you'll never go wrong buying from B&H.  www.bhphotovideo.com  Every pro I know of shops there almost exclusively for all things camera (still or video) and most things audio.

-Troy