Camera - the manual settings that you fear will bog you down
are the great advantage of a camera in your price range.
Fortunately for you they all have auto settings, so you won't have
to use the manual controls. Of course, it's the manual controls
that get you the better picture.

Lighting - All my links are US based, but as long as the brand
names are still the same in the UK, you should be able to do
your own research as to where to purchase. 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 17 years later.

This ?URL="http://www.darkcrimes.com/images/lowbudgetlighting.jpg"?example?/URL? kind of puts all the following links in perspective.

For a nice beginning light kit I recommend:
A couple of ?URL="http://www1.mscdirect.com/CGI/NNSRIT?PMPXNO=9401794&PMT4NO=0"target="?work lights?/URL? with stands from any home improvement
store.

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

Three or four pieces of ?URL="http://www.artsupply.com/brand/foamcore.htm"target="?Foamcore?/URL? from any art supply store to use
to bounce the light.

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

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 ?URL="http://www.studiodepot.com/store/"?Studio Depot?/URL?

Audio - You're right. The on camera mic isn't the best
way to go. 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.

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/"?Sennheiser?/URL? 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/"?Audio-Technica?/url? 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.

I?ve never used ?url="http://www.azdencorp.com/"?Azden?/url? 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"?Rode?/url? is an inexpensive mic - it?s 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 ?url="http://www.bhphotovideo.com/"? B&H Photo?/url?

Editing - You have been told good info. While not the
only option, by any means, a Mac running Final Cut is
a viable choice. It's extremely easy to take your footage
from the camera to the computer. You don't need a
massive internal hard drive - it's advantages to use an
external drive for video footage. Any iMac made in the
last three years will be plenty powerful. the faster the
processor and the more RAM you can afford, the better.
But any G5 iMac will be fine.

=============================================
The aim of an argument or discussion should not be victory, but progress.
Joseph Joubert, essayist (1754-1824)

Thanks so much for all that fantastic info, much appreciated.

I'll definitely spend the money and get a good mic then as suggested.

I appreciate what you were saying about the camera and how the features I fear are the big bonus. I guess I was more getting at, what camera would you suggest is the most user friendly for a newbie like myself, while at the same time allowing me to get more advanced with it as my experience grows? I want to be able to start shooting with it reasonably quickly, without getting 'techno-shock' from a 400 page manual. Any other newbies out there who'd like to share their experiences with getting their first camera?

Your points about lighting are very useful too, I've found a day long course in that which will help me get to grips with the basics.

Thanks again, greatly appreciated.

?url? http://www.dvfreelancer.com/articles/budget.html?/url?

I would highly recommend you go read that article, as it answers your question in detail, and is very well written.

"We all have the potential to be great. It is our inability to do so that makes us miserable." C.S.Lewis

Thanks a million, that article is fantastic.