We've got a bunch of Sony HVR-Z1E's which are pretty good (although still beaten by our old DSR-390's at SD). However the cheapest you're likely to find one is about 2k. It does have a little brother, the HVR-A1E which can be had for £1200. If you're look for something cheaper then the HDR-HC5 looks pretty good. I wouldn't bother with any other manufacturers offerings.

I would stick with HDV over anything else, and I'd stick with tape. Disc systems are good for broadcasters and news crews, but archiving is much easier when you shoot on tape.