There are three things that are VERY important when getting a camera:

Three CCD?s or CMOS
Manual controls for the iris, shutter, focus and white balance.
A microphone input.

The JVC GZ-MG505 is in the $800 range. It has a mic input and
records to a 30GB HHD. The downside is the MPEG-2 compression.
This high compression is lower quality than MiniDV.

I like the new JVC GZ-HD7. I?ve seen these on line for as little as
$1,200. A really nice Fujinon lens makes a huge difference and full
manual controls is important. Three 1/5? 16:9 progressive scan
CCD?s are pretty impressive for a camera in this price range. It records
directly to a built in 60GB hard drive. It has manual controls, a mic
input and an excellent focus ring which is surprisingly rare on small
cameras.

Both the JVC HD5 and HD6 have a mic input and both record to HDD
- the HD6 can record 1080/60p through HDMI - pretty impressive.

The Panasonic HDC-SD100 uses a 3-CMOS array and records 1920 x 1080
video in the AVCHD format to SD and SDHC memory cards. I like the
ring on the lens that controls zoom, focus, white balance, shutter speed,
and iris and it actually has a viewfinder in addition to the LCD screen.
Very important it has both a mic and headphone jack. I found it difficult
to handle with all the cables attached (mic, headphones and monitor)
but it?s a camera with all the basics.

Close is the Canon HV20. It records in HDV (1080i) and 24p (60i), has
a mic input and manual controls of white balance and focus but it uses
one 1/2.7? CMOS sensor rather than 3 CCD?s. And it?s so small the
handling is difficult.

The HV30 adds a 30f (Canon?s ?frame mode?) in addition to 24p.

The Sony HDR-SR12 has a mic input and a good sized 120GB HDD.
It uses a 1/3? CMOS chip and like the Canon is really small. Because
of the input placement, the mic cable kept getting in my way. The
HR9 (which records to tape) is also a nice, very small, camera with
the essentials. Again the mic input is just below the lens which is
rather poor placement, in my opinion.

Just to clarify: Some people are confused about a "boom mic". The
"boom" is a piece of equipment - most often a pole of some kind
- that the microphone is attached to.

What you're looking for is a good shotgun mic. That in itself is a
generic term that means any long barreled mic. You want a good
condenser (externally powered) mic with a ?lobar? pick up pattern
to put on your boom pole. Lobar pick up means the mic focuses
its audio pick up to a narrow area. This is why you want to use a
boom pole to get the mic as close the the actor as possible - you?ll
get clean dialogue tracks with less ambient noise.

?URL? http://www.sennheiserusa.com/newsite/?/URL?
Sennheiser is the mic most used by professional sound recordists.
They are expensive and worth it. Check out the ME-66 and the ME-67.
The MKH60 is the best if you can afford it.

?url? http://www.audio-technica.com/?/url?
Audio-Technica is cheaper. Check out the AT835B. It?s a workable
mic, a little muddy and not as directional as it should be. The AT835ST
is a good mic for the price, but it, too, sounds a bit muddy - the
vocals don?t sound crisp enough for me.

?url? http://www.azdencorp.com/?/url?
I?ve never used Azden mic?s. They?re inexpensive and I don?t hear
too many good things about them, but if that's all you can afford
it's MUCH better than using the camera mic.

?url? http://www.rodemic.com/?pagename=Home?/url?
Rode is an inexpensive mic - they are okay for recording instruments
but their shotgun mic?s aren?t very versatile.

A good mic is an investment. It will last longer than your camera - why
skimp? A great place to check prices and purchase is B&H Photo
?url? http://www.bhphotovideo.com/?/url?

The further away the mic is from the actors, the higher the volume needs
to be. The higher the volume, the more ?noise? you get. Your goal is to
have a very high signal to noise ratio - more signal (the dialogue) less
noise (the background). Even a very good, expensive Sennheiser mounted
on the camera will pick up a lot of background ambiance because it?s far
away from the actors.

So you need a boom pole. This can be as simple as a painters pole with a
microphone shock mount on it - or a 3 or 4 section, expandable Carbon
Fiber, Graphite Fiber or Aluminum boom pole. The lighter the pole the
better. Expandable is also very convenient. A pole that?s a fixed six or
eight feet (painters pole) can pose problems if you?re shooting in a small
space like a bathroom or small apartment or if the boom operator needs
to be twelve to fifteen feet away to be out the the lights.

Lowel makes nice kits. Tungsten lights with stands, barndoors and hard
case. You can also check Arri lights - more expensive and worth every
penny. Not the Lowel kits are bad - I have a 6 light kit with the Omni?s
and Tota?s that I bought new in 1990 and am still using it 18 years later.

For a nice beginning light kit I recommend:
A couple of with stands from any home improvement store.

Five or six ?scoop lights? - those clamp on work lights with the silver
reflector.
http://www.doityourself.com/invt/u239921

Three or four pieces of Foamcore from any art supply store to use to
bounce the light.

Two or three paper lanterns that you can get at Ikea. I hook each
one to a dimmer (home improvement store again) to get better control.
http://www.cherryblossomgardens.com/paper_lanterns.asp

Some colored gels (check on line or if there is a small theater in your
town they often have extras) and some black wrap. Check Studio Depot
http://www.studiodepot.com/store/

This example kind of puts all the following links in perspective.

Editing Software

Sony Vegas
http://www.sonymediasoftware.com/download/step2.asp?DID=583

Adobe Premiere
http://www.adobe.com/support/downloads/product.jsp?product=98&platform=Windows

Ulead VideoStudio
http://www.ulead.com/vs/trial.htm

CyberLink PowerDirector
http://www.cyberlink.com/multi/download/trials_4_ENU.html