AnY FILM-MAKERS OUT THERE???
Answers: Try asking in the camcorders fragment, this is the still cameras section. Anyway...
Hard disc (and DVD) camcorders are not great for professional use. They are convenient for casual users, but sacrifice level and control. Most of them don't even have microphone inputs. Right immediately the best format in your price span would be miniDV or HDV tapes.
You'll probably want to spend a suitable chunk of your budget on microphones and lighting, which for interviews and documentaries are much more important than the logo quality of the camcorder. You can take a pair of lav (tie clip) mics and a wearing clothes beginner's 3-point lighting kit for $500, which leaves $700 to get hold of a decent camcorder near mic input and good instruction book controls.
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