I just recently, 5 months ago, purchased a new digital camera specifically for HD video.
I originally went out to purchase either the Kodak Zi8 or the Flip Ultra but both were disappointing. I ended up purchasing a Canon SD780 IS because it had an optical zoom and an auto-focus lens.
The Kodak Zi8 takes decent video but the quality isn't always great. It has a fixed focus lens and no optical zoom. The Zi8 only has a digital zoom so the quality of the video will deteriorate quickly when zoomed.
My suggestion when buying a new digital camera/video camera, bring an SD card to Best Buy, Fry's, etc and test out the video quality of the Canons, Nikons & Kodak Zi8 on display. Be sure to mention the camera brand and model while recording so you can compare later.
I would suggest testing the Zi8 to at least the following Canons:
Canon SX130 IS, SD1400 IS, SD1300 IS & SD940 IS
They're all in the $200 price range or less.
Test them out and make your own decision.
Not exactly on topic as this camera is twice the price of the Kodak but I just love this test shot. The bus is barely visible before the zoom.
http://www.youtube.com/watch?v=u6dBAdAqGNw